NYSE:KO
$54.34
(2/9 3:13PM)
+3.2%
| Open | $53.69 |
Mkt Cap | $122.0 Billion |
| High | $54.98 |
52Wk High | $59.45 |
| Low | $52.74 |
52Wk Low | $37.44 |
| Volume | 12.4 Million |
Avg Vol 10D | 9.5 Million |
KO Stock Evaluation
Because of a relatively quiet week from a price movement perspective, there has been little change in the valuation of KO recently. Furthermore, there has been no change to the earnings guidance given by the company's management in the last week. Those are two key factors in our fundamental analysis which are unchanged since our last report. In accordance with these static factors, we see no catalyst for a ratings change this week.
Recommendation Summary
As frequent users of Ockham Research are aware, we strive to adhere to the principal of Ockham's Razor. This company ideal drives us to keep our stock analysis as simple as possible, but of course, no simpler than is necessary. It is in that vein that we focus much of our analysis on fundamental factors, peer analysis, and valuations versus historically normal ranges. However, we also apply standard deviation and volatility studies for each index and sector in order to understand more completely the risks associated with each market environment.
In the last twelve months the NYSE has made some gains that start to make a value investor slightly cautious about the future. We are leaving our rating for KO unchanged this week even as the Consumer Goods sector has actually underperformed the broad market's appreciation. At least in this stock's case, the fundamentals are improving at a rate capable of justifying the stock price appreciation for the time being.
The price of KO decreased by 2.14% since our last report on 01/30/2010 but the decrease is not substantial enough to sway our current outlook more positively.
As of this report, there have been no meaningful adjustments in cash earnings expectations or guidance in the last week.
KO Revenue
As a value investing shop, we are interested in seeing how KO's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 5.40x and the low end of the range at 3.85x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for KO of 4.02x is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that KO does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.
KO Cash Earnings
Looking at KO specifically in their Cash Earnings capabilities, Ockham views KO as below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for KO to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 22.38 and a 15.87 low over the same period.
So what does a Cash Earnings ratio below the historical norm mean for KO? Generally, KO's investors have paid slightly higher stock prices for this level of Cash Earnings, which bodes well as a return to historical norms is statistically likely. However, it is never a guarantee that history gives us proper direction, particularly in fluctuating market cycles. So by utilizing a long term view and incorporating other areas of analysis (like Sales, Dividends, and management analysis), each investor can gain a more complete view of KO. Remember, that the average Cash Earnings level for KO has been 19.12, so the current Cash Earnings level of 16.44 is a positive in our view, but by no means is it overwhelming.
KO Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for KO to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for KO is $1.64 producing a current dividend yield of 3.09%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from KO against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from KO over previous years was 4.38% while the lowest dividend yield was 1.16%. A current dividend yield of 11.55% above the historical median is favorable in our analysis of KO.
KO in Developing Markets on Closing Bell
For growth, there is nowhere growing more rapidly than emerging markets. Recently, Closing Bell talked about emerging markets and their impact on Coca-Cola Company.
The Motley Fool CAPS data suggests that investors believe Coca-Cola Company will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KO. Our valuation of KO has become less favorable recently, and we have seen it necessary to downgrade the stock. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KO has been less covered in the news compared to the rest of our universe of stocks.
“… Look at COKE and mcdonald's. Monster volumes in china and india. 29% growth in china, 20% in india, 8% in brazil, decline in u. S. …”
KO Is Among the Five Most Talked About Stocks in the News Today
The newswires are burning up right now on Coca-Cola Company, so check our RazorWire or turn on your TV to see why it is so active in the news.
Coca-Cola Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; KO has received less coverage from the financial media in business television and blogs. Due to deterioration in our valuation, we downgraded KO as of Saturday, January 30, 2010. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… COCA-COLA solid earnings tech stocks are up. Intel. Hewlett-packard not on there due ponl. Alcoa. Prices continue to rise as the dollar softens as some concerns over greek ... …”
Delevoping Economies and Where KO Fits In on Closing Bell
News related to emerging markets affecting Coca-Cola Company today, and Closing Bell discussed some recent developments.
The Motley Fool CAPS data suggests that investors believe Coca-Cola Company will beat the market in the foreseeable future. Our valuation of KO has become less favorable recently, and we have seen it necessary to downgrade the stock. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KO has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KO.
“… COCA-COLA upgraded, mcdonald's. You are speaking to a major investor. > > number 61 on the billionaire's list ike batista joining us to talk about what is going on in brazil ... …”
KO in Developing Markets on Fox Business
Coca-Cola Company and an emerging market growth strategy were discussed recently on KO.
Due to deterioration in our valuation, we downgraded KO as of Saturday, January 30, 2010. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Coca-Cola Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; KO has received less coverage from the financial media in business television and blogs.
“… pepsi has a great opportunity like COCA-COLA. > > why didn't they advertise in the super bowl? > > a lot of people didn't advertise in the super bowl. …”
Fox Business: Discussion of KO's Earnings
Earnings are one of the most important fundamental factors we track, so we are always interested in the latest profit reports and news.
Coca-Cola Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Due to deterioration in our valuation, we downgraded KO as of Saturday, January 30, 2010. We noticed recently that in comparison to all other stocks we analyze in the news; KO has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… we had another dow component to additional COCA-COLA reported in line with expectations. So far the market can look at the earnings and say things are good. > > …”
Delevoping Economies and Where KO Fits In on Fox Business
News related to emerging markets affecting Coca-Cola Company today, and Fox Business discussed some recent developments.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KO has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KO. The Motley Fool CAPS data suggests that investors believe Coca-Cola Company will beat the market in the foreseeable future. Our valuation of KO has become less favorable recently, and we have seen it necessary to downgrade the stock.
“… COCA-COLA, caterpillar is the biggest gainer and mcdonald's with a 6. One% gain in a global sales, in india and china. Global sales making the off for that and toyota motors is ... …”
Learn Why KO Is Being Discussed in the News than Almost Any Other Stock
The newswires are burning up right now on Coca-Cola Company, so check our RazorWire or turn on your TV to see why it is so active in the news.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KO has been less covered in the news compared to the rest of our universe of stocks. The Motley Fool CAPS data suggests that investors believe Coca-Cola Company will beat the market in the foreseeable future. Our valuation of KO has become less favorable recently, and we have seen it necessary to downgrade the stock. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on KO.
“… Highs of the session try things said ganes rainn nano, COCA-COLA come a 55% boeing and alcoa. As a mother riskier trades go back on the table, all call it is one of the dow ... …”
KO's Earnings Were Talked About on Power Lunch
Any suprise in earnings can cause a major swing in stock prices, so we are always on the lookout for the freshest news available for earnings reports or expectations.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. We have recently (Saturday, January 30, 2010) downgraded this stock due to deteriorating fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Coca-Cola Company has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on KO because it trades within the price range that we would expect given current market conditions and fundamentals.
“… Consumer discretionary names like COCA-COLA on the back of strong earnings reports. Let's say the correction is off the table and is that where you would still be putting money? …”
KO Is Among the Five Most Talked About Stocks in the News Today
The newswires are burning up right now on Coca-Cola Company, so check our RazorWire or turn on your TV to see why it is so active in the news.
We have recently (Saturday, January 30, 2010) downgraded this stock due to deteriorating fundamentals. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Coca-Cola Company has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on KO because it trades within the price range that we would expect given current market conditions and fundamentals.
“… We saw COCA-COLA, we saw cisco and we see ibm and we see numbers that might be considered reasonably investable. To sell on that news, they have one finger on the sell button ... …”
Coca-Cola Company Crosses Extremely Active News Threshold for the Day, Now on Fox Business
Be aware that something important has occurred for KO and investors interested in this stock should seek out information in any way possible.
Coca-Cola Company receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Our valuation of KO has become less favorable recently, and we have seen it necessary to downgrade the stock. The Motley Fool CAPS data suggests that investors believe Coca-Cola Company will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, KO has been less covered in the news compared to the rest of our universe of stocks.
“… COCA-COLA reporting profits up 55%. Alcoa, part of a commodity play as we're seeing riskier trade on the table. Boeing and fries and firmly planted in positive territory and ... …”