Dueling Fools: Coca-Cola Bull Rebuttal

Not classic Coke, but not new Coke, either
Remember what makes this stock a Motley Fool Inside Value selection, Fool: It's broken. Growth has flattened in recent years. Operating cash flow growth has declined. But that's the fizz. Wait for the soda to settle. A peek under the ice cubes reveals that new-wave CEO Neville Isdell's investments are beginning to pay off through increased returns on capital:
Period Return on capital Year-over-year gain (percentage points)
Q2 2006 27.1% 1.6
Q1 2006 18.8% 2.3
Q4 2005 14.8% (0.9)
Q3 2005 21.1% 1.7


Source: Capital IQ, a division of Standard & Poor's

Still sugary sweet
Next, let's address marketing. Both Seth and Rick are wrong in claiming that Coke's (NYSE: KO  ) campaigns have lost the 'zazz. Instead, the new "Coke Side of Life" campaign is winning converts and awards. Seriously, check out this list.

Coke doesn't need to teach the world to sing anymore, guys. It just needs to get a few billion thirsty people to keep buying its drinks. Do you really want to bet they'll stop?

Ask us for anall-access passto Inside Value and you'll be privy to chief advisor Philip Durell's best picks, which collectively are beating the market by more than two percentage points. You'll also receive instructive lessons on valuation and company analysis. Give Inside Value a try; it's free for 30 days.

Think you're done with the Duel? You're not! Go back and read the other three arguments, and thenvote for a winner.

Fool contributorTim Beyersenjoys a Coke most afternoons but didn't own the stock or shares in any of the other companies mentioned in this story at the time of publication. Get the skinny on all the stocks in his portfolio by checking Tim's Foolprofile. The Motley Fool'sdisclosure policyis like a cold Coke on a hot day.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 507363, ~/Articles/ArticleHandler.aspx, 12/18/2014 5:46:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement