Value Stocks Episode 5 – The Coca-Cola Company

by | Sep 10, 2018 | Value Stocks Podcasts Episodes | 0 comments

KO stock analysis
Summary:
  • Organic growth will be very modest going forward, but company still produces attractive cash flows.
  • Margins will improve now that they have refranchised their North American bottling operations.
  • The stock price is significantly overvalued even when you consider the high quality of the underlying business.

Introduction

In this episode we discuss The Coca-Cola Company (NYSE: KO). This is a stock that almost every investor is familiar with and has been invested in at one point or another during their career. Currently KO is trading at $45 USD on the NYSE and has released some optimistic full year guidance for 2018 after a period of difficulties in the past 10 years. We hope you enjoy the episode.

Podcast Summary Notes

0:00 – Company Introduction

  • What do they do?
  • What is their market cap?
  • Do you own the stock?

2:40 – Why did you want to talk about this company?

  • A company that most people can relate to
  • A great business

4:40 – What do you like about the company?

  • Inflation protection
  • Shielded from technology disruption
  • Logistics and distribution moat
  • Brand Moat
  • Margins

11:30 – What do you dislike about the company?

  • Price
  • Management
  • Health conscious consumer trend

15:05 – Thoughts on management?

  • Frequency of deal making
  • Management compensation

23:00 – What are your thoughts on moat?

  • Brand moat
  • Logistics and distribution moat

24:15 – What are your thoughts on growth, cash flow, and capital allocation?

  • Limited opportunity for buybacks due to stock valuation

32:30 – Valuation/Intrinsic Value of the business

  • How did you calculate the intrinsic value?
  • Is it an above average business?

40:40 – Final thoughts on the business

Welcome to StockWriteUps.com!

My name is Alex Middleton and I am from Calgary, Alberta.  I believe investing requires one to carefully study publicly available information in an attempt to develop a thesis based on reason and logic.  It also requires one to properly account for the unknown by applying probabilities and margin of safety to their thesis.  I hope you enjoy the content!

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