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The Coca-Cola Company Message Board

  • stockgamblertryingmyluck stockgamblertryingmyluck Apr 10, 2000 11:42 PM Flag


    Instead of trying your luck every time shorting
    KO wishing it drop by 10% or perhaps 20%, why don't
    you just focus on picking some true growth stocks
    that can allow you to get 1000%~2000% return over

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    • KO is a good company and in time will work its
      problems out.

      After I responded to your post
      yesterday, I ran across an article in the Atlanta
      Journal-Constition about Coke. It appears that anal-lists are
      predicting earnings of 21 cents for the first quarter and
      last year KO made 29 cents. If they are correct, there
      may be some more down side risk before the stock
      turns around.

      As you know, I don't put a lot of
      stock in anal-lists but usually this close to
      reporting, the company have given them some

      Japan, will get its act together but as Asia comes out
      of recesion, there is an awful lot of capacity to
      absorb and much of that has been acquired at bargain
      basement prices by American and European companies. This
      may be what is holding Japan on the edge of
      recession. The Macroeconomics are working against them.

      Good luck.

    • thanks for the kind words. Hope your portfolio
      isn't giving you too much grieve.

      I pretty much
      stopped defending KO. I think there is very little
      downside left and a whole lot of room to shine. Even at
      12% growth, the forward PE is compelling to me. But
      stuff happens, markets correct, the world economies
      fizzle, etc.. So like every thing else, there are no

      The thing about Japan doesn't upset me. They have
      been in a recession for 10 years, with a brief ray of
      hope last year. If KO has managed to grow rapidly for
      the first part of the 90s with Japan in the dumps,
      then obviously any improvement in their economy is a
      boost, and any slip into recession is status quo (imo).
      I am looking forward to the day that Japan finally
      gets its act together (for longer that 3 qrts) and
      becomes a real growth driver for KO.

    • well the past week and Daft has kept to KO's
      former growth targets.

      You and he may be right
      and if you are, KO's stock will rise.

      But, the
      anal-lists did not agree with him and I question if he can
      do it. Since I don't put much stock in anal-lists,
      my agreement with them does not lend any support to
      my side of the argument.

      Please note, Japan
      has once again slipped into recession. Japan is a
      very big market for KO. Part of KO's profits will rise
      because the company took large write offs last fiscal
      year. The rise may be more on paper than for real. Keep
      an eye on operating profits.

      As always, I
      wish you well.

    • on a dime. Why should KO? Here the classic "trend
      is your friend" is

      >>>Why do you think 1 time loss will

      KO owns minority positions in all its anchor
      bottlers. Many of the anchor bottlers have low ROI and
      other valuation ratios due to large franchise fees and
      expensive asset purchases from KO. Someday they will write
      these off. KO uses equity accounting methods, portions
      of these writeoffs will be on KO's

      >>>But I think cash is the safest in this kind of
      occasion. <<<

      Yes, I agree. But I think the
      storm is coming.

      With this week's earnings
      announcement, it may not be possible for KO to reach last
      year's earnings. Yes, these are 1 time losses. But how
      long will they continue?

      >>>BTW, do
      you know why exactly did coke writeoff India's

      I don't know specifically, but it seems that India
      had too much on the balance sheet, whether with
      goodwill (franchise fees?) or other. I think this means
      that some portion of past year's earnings were not
      warranted. But they are being deducted this year.

      It's a similar situation as at CCE, the U.S./Europe
      bottler. 20% of KO's business. They have a ROI <1%.
      Someday, goodwill may be written off here as well. And 40%
      will go to KO's books I guess.

      See May's
      SmartMoney Magazine and April's CFO magazine for some good
      overview articles that describe KO's problems.

    • stockgamblertryingmyluck stockgamblertryingmyluck Apr 14, 2000 11:56 PM Flag

      Why do you think 1 time loss will continue? BTW,
      do you know why exactly did coke writeoff India's

      I think coke should be something different from
      railroad or steel. People buy it and drink it everyday and
      it will always be the best know brandname.

      coke has a very strong ability to generate cash. If it
      fall very low, then it's dividend will be so
      attractive that a lot of institute buyer should want to hold
      it in their portfolio.

      Pls don't hesistate to
      correct me if I was wrong.

      Coke did a very good
      job today. Like a rain coat in the thunderstorm. It's
      quite weird. I would appreciate it if someone can
      explain what's going on with coke. Perhaps their meeting
      can explain it.

      But I think cash is the safest
      in this kind of occasion.
      If nasdaq bubble
      burst, Dow can't survive. It can't be as simple as money
      moving from nasdaq to Dow.
      But I guess the game is
      not over yet. People still believe techs can grow
      very fast (some really did, as sunw). The prices of
      tech now make a little sense to me and now can
      understand what growth rate people are wishing at these
      prices, although still very expensive and risky. But
      still don't understand what people are thinking about
      internet stock....Yahoo is the only one that I can think
      of which could possibly satisfy what people wish.

    • "Stocks only go up" - big misconception.

      "No profits, no earning; no problems" - lies

      When the music stops, some people are
      left without a chair. That's the reality.

    • Bow, I will take CFO magazine anytime over
      Business Week. Try to get this month's copy!

      As for
      your note:

      >>>1) Daft has had a lot of
      success growing the company overseas, so he knows what he
      is doing. <<<

      >>>Why didn't
      Daft lower targets since lowered targets are already
      priced into the stock? <<<

      I note last
      year's end of the year writeoff included Japan, a Daft
      territory. And Daft is part of the upper management team
      that told us 15-20% can be reached. Is he an outsider?
      Or same ol', same ol'?

      the kept to his guns. Why? <<<

      the day of reckoning for the stock

      >>>If he, the ceo, feels that confident in KO's growth
      prospects and is willing to put his tush on the line, the
      very least I can do is stick around and see if the man
      can do it.<<<

      Good point. Only I
      don't think you will get the $126M severance package
      his predecessor got.

      Suggest you find that CFO
      April 2000 article and review the July 1997 article.
      Using these article insights, and basic stock market
      accounting applied now in a different way, you may see a new

    • Why do you say this stock can't go

      It is earning similar to 6 years ago, when the stock
      price was 30-50% lower. It is 1 timer losses doing
      this, just as 1 timer gains pushed earnings up in the
      mid '90's. So they equal out and we have a 6 (six!)
      year earnings appreciation of low single digits, even
      if you care to take this year's earnings at face

      Don't forget, 1 time losses continue. And you don't
      know for how long. This quarter you have 15% of
      headquarters staff fired (a big chunk of $725M allotment), a
      syrup inventory writeoff ($0.10/sh loss), $400M India
      writeoff. I think that mean a "red" quarter earnings
      announcement next week.

      Then you have bottlers that
      can't earn a return. Take CCE, even with accountants
      extending depreciation schedules to better earnings, ROI
      will remain very low. Since 40% is owned by KO, any
      writeoff at CCE (or similar other anchor bottlers), goes
      to KO's books.

      Are you a gambling man? What
      are the odds that the writeoffs have

      And if they haven't, then should we start considering
      that 1 time losses should not be disregarded? Maybe
      today's earnings are the real deal to consider when
      evaluating future prospects. Do they deserve even a long
      term PE multiple of 25? The last time KO went through
      a period like the mid '90's was the late '60's
      early '70's. I believe during the decade long period
      following this it created a "bottom" with a PE of 8.

    • here is one fact that I read on the April 17th,
      2000 edition of Business Week (out this week on the
      stands). I will give a brief synopsis:

      When Daft
      succeeded Ivester as head of KO, analysts expected Daft to
      cut back from the "robust growth targets- 7% or 8% a
      year in soda sales and 15% in profits"... But instead
      of cutting the targets as the analysts expected (AND
      Daft is still "gunning for the old targets". After
      "spending his first four months reviewing operations and
      gaining confidence about Coke's ambitious mareking plans"
      Daft told analysts the "WE COULDN'T IN ALL HONESTY"

      1) Daft has had a
      lot of success growing the company overseas, so he
      knows what he is doing.

      2) It would have been
      so easy and so convenient for Daft to lower the
      targets since that is what both big shareholders and the
      analysts wanted to hear, and yet he did not. Why didn't
      Daft lower targets since lowered targets are already
      priced into the stock? He could have lowered targets
      which would have allowed the analysts to go back to
      their models, plug in 12% vs. 15%, spit out a new EPS,
      and everyone could go home happy. Instead the kept to
      his guns. Why?

      Could it be that he did not
      lower targets because he honestly believes the old
      targets are within reach? He is willing to stake his job
      on the line by keeping his aggressive stance. He
      could have done the easy thing, but he didn't. If he,
      the ceo, feels that confident in KO's growth
      prospects and is willing to put his tush on the line, the
      very least I can do is stick around and see if the man
      can do it.

      Besides, KO has been holding on
      pretty darn strong to support levels which is more than
      I can say for the majority of the techs. KO is up
      for the week when all is said and done (though what
      fresh hell we will be put through tomorrow is anyone's
      guess ;-)

    • stockgamblertryingmyluck stockgamblertryingmyluck Apr 13, 2000 11:16 PM Flag

      away from the bottom.
      Ko will still survive,
      might not be as good as it used to, but still a good
      defensive play. 3 years from now it can't be lower than the
      current price, and the return should be at least better
      than putting money in bank.

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