Tuesday, July 11, 2017

Selling Coca-Cola

I sold my full position in KO today, price was $44.42.  I bought the stock back in 2011, have have a cumulative gain in the stock since then of around 28%, which trails the S&P 500 significantly over the same period.  Here is a FastGraph for KO:

What concerns me about KO is their shrinking top line.  They've been losing sales for 5 consecutive years, and seem unable to turn it around.  They've also had declining EPS since 2013, and they are borrowing money to buy back back shares.  This is increasing their debt, and artificially inflating their EPS.  Not a recipe for long term success.

Further, from a big picture standpoint, I think increasingly, there is a war developing on sugar and sugary drinks, and at today's price, the stock is pretty significantly overvalued.

So I'm selling.  I'm banking the cash for now until a better opportunity arrives.....I may dump the money into a telecom or utility for the dividends while a wait.

KO has been riding on its brand name for years.....too much risk for me.


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