The 8-Step Beginner’s Guide to Value Investing: Featuring 20 for 20 - The 20 Best Stocks & ETFs to Buy and Hold for The Next 20 Years: Make Consistent Profits Even in a Bear Market by Freeman Publications

Author:Freeman Publications [Publications, Freeman]
Language: eng
Format: epub
Published: 2020-06-09T20:00:00+00:00

Sprite (soft drink)

Fanta (soft drink)

Schweppes (soda water)

Appletiser (sparkling juice)

Dasani (mineral water)

Powerade (sports drink)

SmartWater (mineral water)

Vitaminwater (sports drink)

ZICO (sports drink)

Minute Maid (juice)

innocent (juice)

Simply (juice)

fairlife (dairy)

AdeS (assorted beverages)

Costa Coffee (coffee chain)

Georgia Coffee (coffee chain)

This isn’t the full list, but as you can see, there are a number of brands in here that are heavyweights in their own right. All of this means that Coca-Cola as a company, still has a lot of demand beyond sugary drinks.

Growth

Tagging a company of this size with the ‘growth’ label might seem ridiculous, but the fact is that Coca-Cola has a long way to grow at the moment. Brands within the Coca-Cola family such as Diet Coca-Cola, Coca-Cola Zero, and Coca-Cola Vanilla and so on have a smaller footprint than the primary product.

Investors often confuse the American market as being representative for the rest of the world, but this is not the case. Internationally, classic Coca-Cola is still the bestseller, but the company has only begun to market and push the other lines of Coca-Cola. For example, five years ago it was close to impossible to find Diet Coca-Cola in India, but now, the country consumes the drink in massive quantities.

Add to this the fact that there are other product lines that the company can push. For example, Dasani water isn’t widely available outside America at the moment, but the company is actively pushing the product, and there is massive potential for sales to increase.

Moat

When it comes to Coca-Cola it is impossible to ignore the sheer size of its moat. The name ‘Coca-Cola’ is widely recognized to the extent that it is used to talk about other types of products as well. Everyone and their grandma has consumed the product, and the color and font of the Coca-Cola script are widely recognized.

Then there's the longevity that the company has displayed. It has been around forever and has weathered six recessions in the United States alone. It has expanded into countries that have come to associate Coca-Cola with America and stand as a symbol of refreshment and a lot more around the world.

It is fashionable to make statements that imply that a giant is about to fall but, to be honest, such statements tend to be false for the most part. It takes a lot of work for a mainstay of the American economy to fall apart, and as of now, this day seems very far away for Coca-Cola. As of this writing, there are less than five countries around the world where Coca-Cola isn’t the top selling soft drink.

Risks

As with everything, there are risks to investing in Coca-Cola. The company has been investing in creating further product lines and diversifying its product portfolio. It has expanded into snacks as well. All of this is a clear sign that it is witnessing a decrease in demand for the core product.

This might seem like bad news, it is, to a certain extent, but it can be mitigated with good diversification. It remains to be seen how well the management carries this out.

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