NEW YORK (TheStreet) -- One of The Coca-Cola Co.'s (KO) minority shareholders, Wintergreen Advisers, said the soft drink maker's CEO Muhtar Kent is "incapable of leading Coke's turn around and should be replaced," Reuters reports.
Shares of Coca-Cola are lower by 0.22% to $40.82 in mid-afternoon trading on Monday.
Wintergreen Advisors owns less than 1% of Coca-Cola and believes the company's shares were "deeply discounted" due to bad management and governance, Reuters added.
"The strategic investments made by CEO Muhtar Kent have destroyed shareholder value. His blunders on failed acquisitions alone have cost shareholders $16.3 billion," Wintergreen said in a statement.
The shareholder said it was worried about Coke's new equity compensation guidelines continuing to unfairly reward the company's high level management, and added that cash bonuses could end up costing shareholders as much as $10.20 per share, Reuters noted.
Separately, TheStreet Ratings team rates COCA-COLA CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COCA-COLA CO (KO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for COCA-COLA CO is rather high; currently it is at 65.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.65% is above that of the industry average.
- COCA-COLA CO's earnings per share declined by 11.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, COCA-COLA CO reported lower earnings of $1.90 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.90).
- KO, with its decline in revenue, slightly underperformed the industry average of 0.6%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Beverages industry and the overall market, COCA-COLA CO's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- You can view the full analysis from the report here: KO Ratings Report