This Day On The Street
Continue to site
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

Coca-Cola Needs Less Fizz in Its Products to Get More in Its Stock

NEW YORK ( TheStreet) -- You can tell when an iconic brand name like Coca-Cola (KO - Get Report) is running out of great sales ideas. If one of the top headlines for the company that invented the word "Coke" reads Slumping Diet Coke Goes Slurpee, even Warren Buffett might start squirming.

As a shareholder I'm glad Coca-Cola is looking for ways to extend the brand, such as selling a Diet Cherry Coke frozen beverage exclusively at 7-Eleven stores under the Slurpee brand as of Wednesday. It might add some fizz to the stock, which is down over 8% for the year to date as of the Wednesday close of $37.87.

KO is down over 13% from its 52-week high partly because of the ominous guidance on its operating profit in 2014 when it released with fourth-quarter earnings last week. It also disappointed when it reported that its beverage volume rose only 1% for the quarter and 2% for the year. CEO Muhtar Kent squarely placed responsibility for the bad news on, you guessed it, the weather as well as the challenging economic conditions in the many areas of the world where it sells its beverages.

Investors aren't buying it -- as in the shares. After the earnings the stock fell nearly 4% and on Feb. 20 it hit a 52-week low of $36.89. Part of the reason that the stock is languishing -- the Atlanta company isn't PepisCo (PEP).

Pepsico has grown its product mix to the point that its snack food division outperforms its beverage segment. Recently I  wrote that as a result, shares of PEP have soared while activist investors push for a shareholder-friendly spinoff of its snack food dynasty.

Diversity-poor Coca-Cola still gets the vast majority of sales and earnings from selling beverages, especially the bubbly kind. In fact about 75% of its global sales volume derives from selling soda pop. That's part of the reason the company had to admit that its fourth-quarter 2013 revenue fell 3.6% to $11.04 billion.

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
KO $43.36 0.93%
AAPL $118.88 0.96%
FB $105.74 -1.13%
GOOG $748.28 -1.02%
TSLA $218.25 0.23%


Chart of I:DJI
DOW 17,812.19 +19.51 0.11%
S&P 500 2,089.14 +2.55 0.12%
NASDAQ 5,102.8080 +0.33 0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs