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OK, so they're not particularly glamorous. And no, they haven't made investors a lot of money lately, but after more than a year of lousy performance, the soft-drink bottlers may be back in the game. Will it last? Some analysts think so, and if you can judge from recent activity, insiders in the group -- especially those at

Coca-Cola Enterprises


-- appear to agree.

The signals date back to November, when Coca-Cola Executive Vice President and Chief Administrative Officer Lowry Kline and President and Chief Operating Officer John Alm exercised options and held onto all of the underlying shares. In all, Kline and Alm acquired 173,000 shares, exercising options that would not have expired until 2002. Notably, both have proven themselves to be shrewd traders of Coca-Cola shares. For example, in August 1998, when the stock plunged from 40 to below 25, each purchased shares near the bottom. Three months later, the shares were back up to 40.

In fact, quiet as they have historically been, when Coca-Cola insiders have surfaced, it has been with some pretty reliable signals. In January and February of 1999, for example, insiders sold just over 180,000 shares at around 34. For a few months, the stock treaded water, but after April, when insiders (including both Kline and Alm) sold 100,000 additional shares at around 36, Coca-Cola took a plunge, starting a long decline to about 16. Only recently has the stock come up for air. It is trading at around 27 today.

In an especially rare show of confidence, Scott Probasco Jr., a Coca-Cola director since 1991, recently purchased call options on the stock. On Dec. 22, with the issue trading around 19, Probasco purchased options to buy 20,000 Coca-Cola shares at 20 per share. For the privilege, Probasco paid 6.43 per share, or roughly $130,000. It is exceedingly rare to see insiders purchasing call options on their company's stock. Company representatives did not respond to calls for comment about the transactions by Probasco, Kline and Alm.

Why all the optimism? Well, for one thing, the company's fourth-quarter earnings were a pleasant surprise, with Coca-Cola Enterprises posting a narrower-than-expected loss. A change in the way the company will depreciate certain classes of fixed assets (management has been conservative in assigning the useful lives to certain assets) will provide an added earnings boost in coming quarters. An ephemeral boost to be sure, but while many value these companies on cash-flow, an earnings-based approach might play better to some on Wall Street.

More importantly, analysts expect a return to positive volume growth after two negative quarters. Keep in mind, pricing and volume is everything in bottling, and at long last it looks as if the initial sticker-shock at last year's price increases has begun to ease. As a result, many who cover the stocks predict an improved pricing environment going forward.

We are all familiar with the cola ad wars, but strange as it seems, the bottlers tend to move as a group. Certainly, none were spared last year's selloff, and all are suffering from rather low valuations. By the same token, bottlers of both


(KO) - Get Coca-Cola Company Report


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(PEP) - Get PepsiCo, Inc. Report

stand to benefit both from better pricing, and from Coke's and Pepsi's renewed efforts to focus on marketing rather than price competition in the coming year.

It may be no coincidence that when insiders began accumulating at Coca-Cola Enterprises back in November, they were joined by those at both

Pepsi Bottling Group


and regional Pepsi bottler


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. Interestingly, some of the very individuals who bought Whitman at around 14 in December sold shares at more than 20 in 1998.

Some might question how reliable insiders are at calling bottoms. They can be early, but they do seem to have a keen eye for value. Insiders at the major bottlers don't send signals very often. When they have, it has paid to listen, both on the sell side and the buy side. Couple this with some improving fundamentals, and those looking to rotate a few dollars into value might find the group a pretty good place to start.

Bob Gabele has been tracking and analyzing insider trading since 1978, most recently for First Call/Thomson Financial. This column is not meant as investment advice; it is instead meant to provide insight into the methods of insider trading. At time of publication, Gabele held no position in any of the companies discussed in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Gabele appreciates your feedback at