Macroaxis Stories

Are retail investors obtaining Coca Cola (USA Stocks:KO) or Monster Beverage?

June 6, 2024  By Aina Ster
Macroaxis Story
By comparing basic indicators between Coca Cola and Monster, we can examine the impact of market volatility on both companies' prices and assess if they can mitigate market risk when combined in a portfolio. Pair trading strategies can also be employed, such as matching a long position in Monster with a short position in Coca Cola. For more details, refer to our pair correlation module. Let's analyze the assets. The asset utilization indicator measures the revenue generated for every dollar of assets a company reports. Coca Cola has an asset utilization ratio of 46.83 percent, implying that the company generates $0.47 for each dollar of assets. An increasing asset utilization ratio indicates that Coca Cola is becoming more efficient in using its assets for daily operations.

Main Takeaways

Coca Cola (NYSE: KO), a giant in the Beverages - Non-Alcoholic industry, presents a compelling investment opportunity for retail investors. With a robust net asset value of $97.7B and a healthy net income of $10.7B, the company's financial health is solid. Despite a modest five-year return of 3.13%, the company's revenue per share stands at 10.668, indicating a strong earning potential. On the other hand, the price to earnings ratio of 27.50X and price to earnings to growth of 2.93X suggest that the stock may be overvalued. However, with a short ratio of 2.46 and short percent of 0.0075, the risk of a short squeeze is relatively low. Therefore, considering these factors, Coca Cola appears to be a more stable investment compared to Monster Beverage.
Published over six months ago
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Reviewed by Ellen Johnson

In the non-alcoholic beverages industry, The Coca Cola Company (NYSE: KO) continues to be a dominant player with an impressive total revenue of $45.8B. Despite the challenges of the consumer defensive category, Coca Cola has been able to maintain a strong profit margin of 23.41%, a testament to its robust financial management and strategic initiatives. The company's stability is further evidenced by its low beta of 0.575, suggesting lower volatility relative to the market. However, retail investors might be concerned about the company's five-year return of only 3.13%. The question now is, does Coca Cola present a better buying opportunity than Monster Beverage, or should investors look elsewhere? While some millennials may be indifferent towards the beverage sector, we will assess the health of Coca Cola's fundamentals in comparison to Monster Beverage. Our focus will be on the competitive aspects of both companies.
Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in Coca Cola. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its performance over time. Several factors influence the investment perspective on Coca Cola, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.

How important is Coca Cola's Liquidity

Coca Cola financial leverage refers to using borrowed capital as a funding source to finance The Coca Cola ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Coca Cola financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Coca Cola's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Coca Cola's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Coca Cola's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Coca Cola, but it might be worth checking our own buy vs. sell analysis

Coca Cola Gross Profit

Coca Cola Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Coca Cola previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Coca Cola Gross Profit growth over the last 10 years. Please check Coca Cola's gross profit and other fundamental indicators for more details.

A Deeper look at Coca

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at Coca Cola revenue. Based on the latest financial disclosure, The Coca Cola reported 45.75 B of revenue.
This is 208.01% higher than that of the Beverages sector and significantly higher than that of the Consumer Staples industry. The revenue for all United States stocks is significantly lower than that of Coca Cola. As for Monster Beverage we see revenue of 7.14 B, which is much higher than that of the Consumer Staples
KO
45.8 B
KO45.75 Billion86.5
Sector0.00.0
MNST7.14 Billion13.5
"Buy low, sell high" is a classic investment adage that could be applied when considering Coca Cola (NYSE: KO) and Monster Beverage. Despite Coca Cola's recent price action indicator of -0.01, the company's strong fundamentals, such as a net income of $10.71B and operating income of $11.3B, suggest potential for growth. The company's current ratio of 1.13X indicates a healthy short-term liquidity position, while a five-year return of 3.13% demonstrates steady performance. Moreover, with a market capitalization of $275.36B and a target price of $67.43, Coca Cola presents a potential upside of 1.5. Therefore, for retail investors seeking a stable investment in the non-alcoholic beverages industry, Coca Cola may be a better buy compared to Monster Beverage..

Coca Cola has 81 percent chance to finish below $63 next week

The recent mean deviation increase over 0.51 for Coca Cola suggests a potential rise in the stock's volatility. Coupled with other market factors, there's an 81% likelihood that Coca Cola's stock will close below $63 in the upcoming week. Investors should take this potential downtrend into account when making trading decisions. Despite Coca Cola's robust brand and global reach, short-term market fluctuations can affect the stock's performance. As of June 6th, Coca Cola's Mean Deviation is 0.514, Semi Deviation is 0.5052, and Risk Adjusted Performance is 0.1134.
Technical analysis of Coca Cola uses historical prices and volume patterns to predict the company's future price direction.Despite the recent decline in Coca Cola's stock price, the analyst consensus remains a Strong Buy, with 13 strong buys and 5 buys. The analyst target price estimated value stands at $61.97, which suggests a potential upside from the current market value of $63.92. Furthermore, the valuation real value is estimated at $67.83, which is higher than the highest analyst estimated target price of $68.79. This indicates that the stock is undervalued and has room for growth. However, investors should also consider the possible downside price of $63.84 and the number of analyst holds at 6. Therefore, while the stock has declined, the data suggests that Coca Cola remains a strong investment opportunity..

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Editorial Staff

Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of The Coca Cola. Please refer to our Terms of Use for any information regarding our disclosure principles.

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