WILL COCA-COLA ALWAYS GO UP? Message Board

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Strategies & Market Trends : WILL COCA-COLA ALWAYS GO UP?

KO 72.88

+0.4%

Nov 26 3:59 PM EST

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To: Jerry Miller who wrote (570)	8/8/1997 3:09:00 PM
From: Michael Dunn	of 1462

<<...there was some rather confusing news this morning about their numbers for Q3...selling some holdings to keep the numbers propped up, is what it sounded like to me.>> They have been doing the same thing for at least the last 4 quarters (probably longer, read some 10-Qs). Every quarter they use one time gains to prop up their earning growth. I don't know how long they can continue this. The earnings from regular operations are essentially flat for the past 1 1/2 years. If KO was getting 19% earnings growth from regular operations the stock might be worth a P/E of 30. However when their core earnings have no growth (or very little) and getting earnings growth through accounting slight of hand and one time gains the stock is worth more like a P/E of 22. I have chosen to short KO because of these propped up earnings, low revenue growth, and high P/E. I think it's a great company however, it is not worth a P/E of 41. Mike

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