Why Coca-Cola Ended Today As the Dow's Best Performer

Geopolitical issues hurt the major indexes today and nearly every stock within them.

Mar 3, 2014 at 9:00PM
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With news that Russia has boots on the ground in Ukraine, investors are fearful about what could happen next. That's a big part of why the three major U.S. indexes all ended the day much lower than where they started. The Dow Jones Industrial Average (DJINDICES:^DJI) lost 153 points, or 0.94%, while the S&P 500 dropped fell 0.74% and the Nasdaq declined 0.72%.

Things weren't a whole lot better for individual stocks, as not a single Dow component ended the session in the black. Coca-Cola (NYSE:KO), down 0.21%, lost the least of any Dow stock, possibly getting a boost from Warren Buffett. The Oracle holds a stake in Coke, and he said this morning that even though the company is under more pressure than it's been in a long time, he will still probably hold shares for the next five years. That was sure to have turned heads in a time when Coke has struggled to grow revenue as volumes decline within its key market of North America.

Coke's recent move to take a 10% stake in Green Mountain Coffee Roasters (NASDAQ:GMCR) divided investors, with some seeing Coke grasping at straws and others seeing the potential for an eventual shakeup the home brewing industry. Those forward-looking investors may have gotten some validation this morning, when a Barclays analyst downgraded shares of SodaStream (NASDAQ:SODA) from "overweight" to "equal weight" and reduced the price target from $55 down all the way to $40 -- barely higher than today's $39.04 close. The analyst cited new competition as a big concern, and given Coke and Green Mountain's plans to make a cold-beverage machine, I think the analyst was indirectly taking a bullish stance on Coke's new venture.

Between Buffett and Barclays, Coke investors appear to have reason for optimism moving forward.

As for the events in Ukraine, the prospect of war means the markets could falter in the short term, as they did today. And while the events bear watching, they shouldn't affect your investment strategy. Don't focus on how much you'll lose and when you should sell. If anything, a market dip may present an opportunity to buy stocks at a discount. As always, stay focused on the long term.

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Matt Thalman owns shares of Berkshire Hathaway and Coca-Cola. The Motley Fool recommends Berkshire Hathaway, Coca-Cola, Green Mountain Coffee Roasters, and SodaStream and owns shares of Berkshire Hathaway, Coca-Cola, and SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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