WILL COCA-COLA ALWAYS GO UP? Message Board

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

KO 71.65

+1.6%

Nov 11 3:59 PM EST

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To: Chip Roos who wrote (1266)	9/25/1998 10:01:00 AM
From: Duker	of 1462

Chip, I am waiting along with you. I have always longed to own this company and have never been able to get comfortable with the valuation. Is the stock cheap at a $45 entry point? No, I agree with you. Maybe a realistic number for 1999 is $1.70? That is still about 26x's FY1999E. Maybe $2.00 in 2000 (22.5 x's)? I don't really know. Those valuations are pretty rich. What do you get? A company with one of the greatest business models in history. 40%++ ROIC...70% Gross Margins...Steady growth...not spectacular, but steady...no inventory...$1.6bn in marketing expense...some of which could be termed discretionary...if half were, then you could argue that the company could milk another $.20+ on the EPS line... Still, how does it get cheaper? Basically, market risk. I am not smart enough to know where the market is going to go and if KO would be penalized pari passu -- could become defensive (or more defensive). Tough call. I'll wait. Probably at my own peril. --Duker

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