Opinions
Kash Pashootan
Coca-Cola Company
KO-N
COMMENT
Jan 29, 2016
Stock price when the opinion was issued
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Premium contentThe Coca-Cola Company is an American multinational corporation founded in 1892, best known as the producer of Coca-Cola. The drink industry company also manufactures, sells, and markets other non-alcoholic beverage concentrates and syrups, and alcoholic beverages. Social media mentions are up 67% in the past 24h.
Premium contentThe Coca-Cola Co is the nonalcoholic beverage company, which engages in the manufacture, market, and sale of non-alcoholic beverages which include sparkling soft drinks, water, enhanced water and sports drinks, juice, dairy and plant-based beverages, tea and coffee and energy drinks. Its brands include Coca-Cola, Diet Coke, Coca-Cola Zero, Fanta, Sprite, Minute Maid, Georgia, Powerade, Del Valle, Schweppes, Aquarius, Minute Maid Pulpy, Dasani, Simply, Glaceau Vitaminwater, Bonaqua, Gold Peak, Fuze Tea, Glaceau Smartwater, and Ice Dew. It operates through the following segments: Europe, Middle East and Africa, Latin America, North America, Asia Pacific, Bottling Investments and Global Ventures. The company was founded by Asa Griggs Candler in 1886 and is headquartered in Atlanta, GA. Social media mentions are up 700% in the past 24h.
Brand strength, pricing power, geographic diversification. Big potential expansion in coffee. Really gets local culture. Chart shows a bit of resistance at this level, and we want to see it get through that. Whole chart is decent. Down less than the market these last few days. Beverage sector is pretty defensive and predictable. Metrics look pretty good. Yield is 2.82%.
(Analysts’ price target is $75.38)Operates in a cola duopoly with PEP. He likes market leaders like these that have little to no direct competition. That being said, it's a lot harder these days with consumer brands to establish a brand and build a moat. Today he could launch a cola company online, using Instagram and FB, with very little cost and effort, and with luck it could even go viral. Brands will have a tough time.
Very strong, well-established brand. He owns FEVR, take a look at that one.
Coca-Cola (KO-N) or PepsiCo (PEP-N)? The key difference is that Pepsi has a more established non-beverage business. Coke has not done as well, but has a more established bottling business, with about 15% of business coming from this. It is a low margin high capital business and there are rumours that they will be getting out of this. Would prefer Dr. Pepper Snapple Group (DPS-N) which has about a 10th of the market share of these 2, so there is an opportunity to steal market share.