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Strategies & Market Trends : LastShadow's Position Trading

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To: Dave Shares who wrote (63)	8/29/1998 8:09:00 AM
From: Michael Berkel	Read Replies (1) of 43080

Short Coke! They made $1.64 last year and they will earn $1.58 this year, provided their earnings will not be totally hurt by the Russia and Asia flu. In 1999 they could earn $1.75. That doesn't justify a price earnings of 50. To quote Bill Meeham, Chief Market Strategist at Cantor Fitzgerald: "History has shown that it is not a profitable investment strategy to pay 50 times future earnings for a company that is growing at 20%" and in Coke's case even a lesser percentage. Food and Beverage stocks have failed to shelter investors this summer. My next target for Coke is $50.00, which is still a steep valuation but not too crazy for a well-known brand. Happy trading, Michael

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