Playing the stock market can be a risky venture, but if you do a little research before you buy a stock you will be able to make a calculated risk that will hopefully pay off. This article will provide you with a little background on Coca Cola’s stock KO. This information should be used to gain a better understanding of the company’s stock performance in the past, as well as develop an idea of how strong the stock is right now.
Coca Cola Stock Symbol KO
The first thing you should research when deciding on a stock to purchase is what the company actually does. In the case of the Coca-Cola Company the answer is pretty straight forward. They are a company that manufactures and distributes soft-drinks and other beverages. While this may be an adequate description for a quick analysis of the stock, if you are a serious investor you will want to examine all of the business activities that the company executes. A deeper investigation of this company will show that the Coca-Cola Company not only manufactures and distributes beverages, but they also produce a merchandise line, they operate scholarship programs, and they operate community outreach programs. It is important to know about these supplemental business activities because they add to the overall stability and potential value of the stock.
KO’s Performance in the Last 52 Weeks
In the 52 weeks ending on 08/25/06, KO’s stock value has fluctuated between 39.36 and 44.79. On 08/25/06 this stock has a stock value that hovered around 44.52, showing an improvement in the stock’s value from its value earlier in the year. If the stock continues to perform like it has in the past, it is projected that it should increase in value over the next year and reach an upper value of $48.06.
Historical Performance – Last Five Years
KO has experienced its share of large peaks and large valleys over the last five years. In 2002 this stock saw its last really high spike valued at over $58. This stock also saw its last really low valley in 2003 with stock value of less than $39. Since these extreme high and extreme low values the stock has fluctuated up and down, but it has also shown a long term trend of increasing in value.
Explanations of Past Lows
KO’s dip in the early part of the 2000’s was most likely due to bad PR the company received for internal problems with discriminatory hiring practices. As a result of these problems they were faced with a class action lawsuit that cost them a lot of money, and a lot of public respect. Since this incident the company has been able to rebuild their Good Will assets by incorporating internal controls that monitor for and correct management policies that could be seen as discriminatory. They have also invested a large amount of money in promoting the education, hiring of, and promotion of minorities within the Coca-Cola Company and the communities that they serve. All of these actions have improves the strength of the Coca-Cola Company, which has in turn improved the strength of the stock.
KO has several strengths. First it has a strong brand identity, and it is recognizable around the world. It also has a nostalgic value, making it a popular brand for Baby Boomers and their families. As a result of these first two strengths the company has been able to gain a sizable share of the beverage market. KO also has been able to produce a large Net Income of 5.09 Billion a year. Another strength that this stock has is that it offers a great Dividend and Yield to its shareholders of about 2.8%. Finally, KO only has a few major competitors in the beverage market, namely Pepsi and Cadburry Schweppes, PLC.
While KO has a lot of strengths as a company, and as a stock, it does have a few weaknesses. First its past internal problems with discriminatory employer practices has scarred its public perception, and as a result they have lost some customers for ever. To correct this problem they have had to divert millions of dollars of money to cleaning up their image and to paying off disgruntled employees. This diverted money cuts into the company’s bottomline and stock profits. The second main weakness that KO has is that its competitor Pepsi has geared its advertisements to gaining a younger market, which may cause KO to lose ground in the market once the Baby Boomer generation starts to fade away.