Last week, Warren Buffett's Berkshire Hathaway ( BRK.A) submitted its fourth-quarter stock holdings to the SEC.
In the SEC filing, we learned that Berkshire decreased several major positions, including Procter & Gamble ( PG) , ConocoPhillips ( COP) and Johnson & Johnson ( JNJ). However, Berkshire's 200-million-share-stake in Coca-Cola ( KO) didn't change. Why? The following are key insights on Coca-Cola from TheStreet.com. From Why Buffett Is Sticking With Coca-Cola: What does the Buffett approach like about Coca-Cola, whose 2,800-plus products include not only Coke but also major brands such as Sprite, Minute Maid, Powerade, Nestea, Dasani and Fanta? A lot. For starters, Buffett has typically seeks out firms that have posted persistent earnings growth over the long haul, and Atlanta-based Coca-Cola's earnings dip this year was its first since 2000 -- and considering the earnings-sapping recession we're in, the 8-cent drop from 2007 to 2008 isn't bad at all. Secondly, Coca-Cola has $5.76 billion in annual earnings, meaning it could pay off its $2.78 billion in debt in less than half a year, if it so chose. That's just the kind of conservative financing that my Buffett-based model prizes. Another reason this model likes Coca-Cola is its management. Read the full version of Why Buffett Is Sticking With Coca-Cola (on RealMoney). From Coke's Stock Opens Happiness for Investors: Investors are more favorable to Coke than they have been. The company's stock has fallen only 5.5% this year, making it the Dow's second-best performer. TheStreet.com Ratings' quantitative model, which examines a company's valuation metrics, financial situation and analysts' consensus expectations of future growth, awards Coke a B-minus, which equates with a "buy" recommendation. With a dividend yield topping 3.5% and priced at a modest 13.8, Coke's reward grade from TheStreet.com Ratings is a B-plus. Its $9.3 billion in debt and price of nearly five times book value hold the firm's risk grade to a C-minus. Read the full version of Coke's Stock Opens Happiness for Investors ( TheStreet.com Ratings Report on Coca-Cola).