Coca-Cola Co. (KO) is an perfect example of a good company, excessively overvalued in the late stages of a bull market. KO is now ready to correct in the next bear market (if we ever get one again). Trading at 38 times earnings, (double the expected growth rate) KO makes a good short candidate. Anyone buying at this price is certainly not looking for value. A more realistic valuation of 25 times earnings would price Coca-Cola at 35 which is considerably down from the absurd price of 51 which it trades at currently.
Everyone knows it is overprice, it simply a matter of time before the correction begins. How much longer can mutual fund keep dumping new funds in this overpriced "no-brainer?" |
