Wednesday, 22 July 2015

Coca-Cola: still awaiting that US$38 level to buy...

The last time I formally wrote about Coca-Cola (link here) I noted that:

'Fundamentally there is no problem here but you buy a stock at x17 2015e EV/ebit with caution despite the medium-term growth potential and brand strength.  I think that means below the aforementioned US$38 level for investors interested in nearer term capital growth / total return potential and not just buying and holding like Warren Buffett'



With the share within a US$1 of where it was in December when I last wrote it is tempting to conclude for an overt buying level you wait for that aforementioned US$38 level.  

Today's numbers from Coca-Cola were perfectly workable with positive metrics on value share, unit cases, volumes and price-mix...



...and reiterated numbers including continued solid cash flow and shareholder remuneration (dividends and buybacks - if you annualise the YTD run-rate then this level is equivalent to 7%+ yield which is not too shabby).


Nevertheless the environment is not the easiest as shown below: 'full year comparable currency neutral growth expectations' even with ongoing cost cutting initiatives still makes me wait for the US$38 level.



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