This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Investing in Coca-Cola Is the 'Real Thing'

NEW YORK ( TheStreet) -- The East Coast took a pounding and a super-wet licking, but just like the old Timex watch commercials reminded us, "it takes a licking but keeps on ticking." In the aftermath of this natural disaster recovery efforts abound.

The toll of human suffering and inconveniences is beyond comprehension, but Americans have a way of pulling together in a mindset of cooperation and getting back to the art of living. They share what they have with neighbors and friends. To celebrate their survival or their relationships they pop open a can of Coca-Cola and toast to the hope of brighter days ahead.

CocaCola (KO - Get Report) had subdued earnings results in the third quarter, where their year-over-year earnings growth rose 3.9%. Not bad for a time period riddled with uncertainty and consumer angst all around the globe.

While experiencing healthy results in North America, its overseas business was dampened by China's anemic 2% increase in sales volume for the quarter, as compared to more than 10% a year earlier. Coke's CEO Muhtar Kent made comments in the conference call Oct. 16 suggesting that China's government has been focused more on trying to tamp down inflation and not on economic growth.

The Wall Street Journal reported Kent said, "As we look ahead to the next six months, it is reasonable to expect that China's continuing economic slowdown may have a short-term effect on our industry and our business."

Thus the leader of KO is guiding expectations downward for the fourth quarter. That may spell opportunity for investors wanting to add to existing stock positions. It also may present a good entry point for those interested in following one of Coke's long-term, big-time investors, Warren Buffett. His mega- holding company Berkshire Hathaway (BRK-A) owns 400 million shares, almost 9% of the outstanding shares as of June 29.

Jim Cramer's protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

KO Chart KO data by YCharts

As you can see from the poignant 5-year chart above, KO's price-per-share has followed its price-to-earnings ratio which has been ascending back to its pre-2009 levels. With over a 23% operating margin trailing 12 months and a 26.42% return-on-equity, it's no wonder that company director Barry Diller directly owns about 1.76 million shares.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
KO $39.49 0.00%
PEP $94.66 0.00%
SNY $49.47 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs