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The Coca-Cola Company Message Board

  • rbco rbco Apr 27, 1998 10:39 AM Flag

    Buffet 1988 vs. 1998 fundamentals

    I reviewed some fundamentals for 1988 and 1998. I believe 1988 is when Buffet bought the stock. Stock
    What if Price Using
    1988 1998 $ 34 p/s 1988 ratios

    Price to Sales 1.93 9.20 4.25 15.73
    Price to Cash Flow 11.63 39.47 17.89 22.09
    Price to Earnings 13.90 48.00 21.25 22.93
    Price to Book Value 4.67 21.43 9.7143 16.35
    Dividend Yield 3.00 % .84 % 1.84 21
    Dividends to NetProfit 42 % 37 % 37 % 37 %

    Any comments. Just some info. Is my analysis wrong, please help.

    Ron
    Rbco@home.com

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • > Is my analysis wrong, please
      help.

      You're saying that if we valued KO based on various
      ratios from
      1988 we'd get some valuation lower than
      the current market
      price. That much is correct. No
      one is going to deny that.
      But so what?
      Just
      because it was an outrageously good buy at some earlier

      date doesn't mean it's not a good buy now.
      If
      someone offers to sell you a 3 carat diamond for $75,
      would
      you buy it? Would the fact that the seller bought it
      for $5
      ten years ago bother you?
      You may think
      my metaphor is absurd, but which do think will
      be
      more valuable 50 or 60 years from now, your KO share
      (and
      all its future dividends and splits) or the
      diamond?
      diamond?

      • 1 Reply to kointc
      • The analyst are correct the market has varied
        from time to time and if you can time the market you
        can teach what you know and be very rich indeed . The
        best way to buy stock is to buy on a regular basis
        continously and you will have an average cost some high some
        low in relation to the pe . This is the only sensible
        way to buy . If you think KO is high now don't buy
        it.
        If you think its too high now wait until next year .
        and remember the saddest of all things is what might
        have been.
        Mark Twain was a friend of Alexander
        Graham Bell and was asked to help in the funding of his
        new telephone , to which Mark Twain responded that is
        the dumbest thing he ever heard of ,"who's going to
        sit and talk on that fool contraption , if i am going
        to talk to you I'll come to see you . You have heard
        the rest of the story. Another bear story to read to
        your grandchildren, and tell them about the time when
        you could have purchased KO for 76 dollars .
        A
        buffett story on numbers is interesting about the island
        of Manhattan when the Indians sold it to the little
        dutchman Peter M. for 24 dollars think that was a bad deal
        . wrong the unimproved value of Manhattan Island is
        currently valued at 24 billion dollars according to Buffett
        if the Indians had a financial advisor and had
        invested in a modest 6% return the 24 dollars would be
        worth in excess of the current value of Manhattan .
        Time + compounded interest is the the 8th wonder of
        the world.
        try it you will like it .

    • Buffett is on the Board of Directors of KO and is on the Audit
      and Finance Commitee. So he is a Finance Director. What's
      your Question?

      MYCROFT

    • Buffett is on the Board of Directors of KO and is on the Audit
      and Finance Commitee. So he is a Finance Director. What's
      you Question?

      MYCROFT

    • i did a little analysis on all of asia and india and came to
      the conclusion that if asians drink by the year 2007
      100 cokes per year each, we will have a eps in that year of
      $ 9.40. If you multiply that by a pe of 40 you get a stock price
      of $ 376 this analysis is based on ko making a 1.5 penny profit per can sold. If you compound that result over ten years, you
      get an ten year estimated growth rate of 17+% for ko' eps.
      the market price, currently $ 76 as i am writing this, if it
      goes to $376 in 2007 the compounded growth rate on
      the market price will be 17.34%. I'll be very happy making
      17.34% gain on my investment in ko every year.

      go ko!!!!!!!!!!!!!!!!!!!!!

      mycroft

    • Pass me another coke and I'll ponder this one.

    • Where did you hear this? I knew Buffett was a KO director. Buffett is chairman of KO's finance committee?

    • India and China acount for more than 2 BILLION of the world population. Just imagine if KO got there consumption to even 10 servings a day. Thisnumber would more than double KO's volume growth. And imagine if consumption is at North AMerican levels (350) per person a year. Ko's earnings would soar. The P/E is well deserved and the stock WILL SKYROCKET!

    • Dear Whats411,

      When I said 19%, I was talking about the 5 year net income
      growth for the last five years which was actually 19.9%.
      The information is from the latest 10-k report on page 41.
      I think the future may surprise you looking out to the year
      2000, KO will have 1,000,000 outlets in India selling
      their products by that time. How can you possibly forcast the
      earnings when the growth potential of the Emerging Countries are
      growing like gangbusters and is unknown to everyone.
      Put your seatbelt on for I believe that KO will surprise
      everyone in the future with Volume Growth that we have never
      seen in the past.

      MYCROFT

    • When I bought the stock the growth rate was around 19% and the p/e around 22. My cost is around $12 a share and I still
      think the stock is overvalued looking at future earnings estimates. Ko eps 1996- $1.40 Ko eps 1997 - $1.64 with a .23 one time
      gain. 1998 - eps est. $1.65 and 1999- eps est.$1.93 where is the 19% growth now. Ko management does a great job of steering
      analyst to the right number. 1st quarter was a perfect example when analyst estimates where for .36 and then went down to my number
      of .34 before they released the earnings, this way earnings met analyst estimates. That is why the street loves ko because they
      do not surprise them with earnings. Now management is saying 15% to 20% eps growth and I am saying 15% max.

    • Does anybody know this ..

      I haerd from a friend in Wall st .
      that all the soft drinks market from
      Pepsi are taken by KO ..

      So KO means THE SOFT DRINK ..

      Interesting ..

      Any information will be appreciated.

    • View More Messages
 
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