Coca-Cola Company (KO)

PE in the high teens. Consistently make money and have been consistently growing. As long as the business continues to do what it has been doing, that multiple will be there and the stock price will go up as much as they grow earnings. The risk to this is that if anything ever does happen to the business, the threat on the downside is that you have the valuation pulling off. Also, there isn’t really much upside if you are looking for capital gain.

Consumer discretionary is getting a bit tired. There has been a violation of the run up, so it is over for a while.

Doesn’t find the valuation that attractive. Growth is slowing down a little bit. Haven’t added the product categories at the same rate that Pepsi (PEP-N) has. You won’t lose money on it but he doesn’t see big upside. Earnings growth has clearly slowed down.

Stable company, good grower over the long term. If we have a shock to the markets in 2013 with the fiscal cliff, that would be a better time to put money to work. Buy it closer to the 52 week low.

Great long term track record. Not cheap but good value. A good store of value over time.

Great franchise and a wonderful brand. Trades at about 17X earnings so a little bit rich for a beverage company. Soft drink side of the industry, all sodas, has really struggled and they have been making their money on other beverages. Prefers Pepsi-Cola (PEP-N) because of their salty snack business which has a huge franchise in Frito-Lay. So he is more comfortable with the safety of Pepsi.

Feels there is more upside in the beer space, such as Carlsberg (CARL-OMX). If you are selecting between Coca-Cola and Pepsi (PEP-N), Coca-Cola is the longer-term performer with a good track record, good dividend in good balance sheet. Pepsi is going to offer you much more upside.

One of the world’s most valuable brands. These types of companies have value when their brands are so valuable. Consumer staple, so a defensive stock. Like that it pulled back to its 200 day moving average indicating it was oversold. 2.7% dividend, which is going to grow at 7%-8% per year on average. Low beta stock.

Prefers Pepsico (PEP-N) which is a couple of multiple points cheaper. It is also more diversified. Has Frito-Lay’s. Bigger yield.

Options for this company look cheap because it is not one of the more volatile stocks so the option premiums reflect the lower volatility. The old theory on stock splits is that when you split the share price, you invite more investors to be able to participate and was positive for the stock price. However, there doesn’t seem to be a large retail presence in the market today. He would be wary of making a bet that this will go up simply on the basis of a stock split.

Just did a 2-for-1 split. Expensive stock at 19-20 times earnings. Doesn’t have the growth profile to justify the multiple.