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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Coca-Cola's Pause Can Refresh Your Profits

NEW YORK (TheStreet) -- It's not often that shares of Coca-Cola (KO) fall below their fair-market value. Even amid so-called "bad quarters," these shares rarely get cheap. Although Coca-Cola didn't have an exceptional fourth quarter, don't expect the stock's recent 4% decline to snowball out of control. With shares down roughly 13% from their May 2013 high, there's still plenty of value to be had here.

As seen in results from PepsiCo (PEP) and Dr. Pepper Snapple (DPS), weak volume and compressed margins have been the story in the food and beverage sector. Not to mention, the entire group has been hurt by the term "liquid candy," shorthand for heightened nutritional fears regarding the rise of obesity. This is an issue that plagues close to 40% of Americans and has become a global concern.

[Read: Sozzi: 10 Awesome New Foods Invading U.S. Supermarkets]

Accordingly, with vocal opposition from the likes of former Mayor Bloomberg in New York, many states have begun to prioritize ways to address (among other things) beverage consumption, which according to many experts is a key contributor to weight gain. Today, the Street is acting surprised that Coca-Cola's fourth-quarter revenue declined 4% year over year.

It's true the 1% total volume growth for the quarter (versus expectations were for 2-3%) disappointed. I won't even pretend that that 1% decline in North America isn't a big deal. But with so many social/business obstacles in the Carbonated Soft Drink  market, what did we expect?

[Read: Jim Cramer: Where the Bargains Are]

As TheStreet's Stephanie Link pointed out in an article yesterday, there is still much more to Coke than a meager North American soft drink company. The soft drinks segment is only one aspect of it its business.

Link pointed out that close to 80% of Coca-Cola's operating profit comes from international markets, with a meaningful percentage (roughly 55% of its total operating income) coming from emerging markets. Let's also not discount that the company grew volumes by 8% and 6% in India and Africa, respectively. And despite China's economic struggles, the region still grew 3%. What this means is that Coca-Cola, despite the downbeat results, still has growth on tap.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,919.59 +80.85 0.48%
S&P 500 1,981.60 +9.86 0.50%
NASDAQ 4,527.5140 +19.2020 0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs