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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (52473)	10/6/2013 12:59:24 PM
From: Spekulatius	Respond to of 78519

Re KO - if i researched it correctly, you sold KO in 2009. Based on what the stock market has done, this probably was the right decision at this time. Since then, KO's intrinsic value and also overall market multiples have increased quite bit. You are correct, thatI did not buy KO at this time. I did buy NSRGY in early 2009 and part of those positions I still hold (in my US account). as I mentioned before, I like NSRGY better as a company but as an US investor, there is a swiss withholding tax to content with (partly you get them refunded back when it's not held in an IRA). So i think, right now KO is a better buy. I agree that it's more of an relative value than an absolute one. I see roughly 6% FCF yield, half of which goes towards the dividend and half towards buyback. My rough model is that we will get a low double digit return composed of ~5% organic growth+3% dividend+3% buyback (which essentially translate into an earnings/share growth boost). This would be an ~11% return p.A, assume stable PE multiples, and that is not a bad return, given that KO is an equity bond. I do this, because i want to replace my NSRGY position, that i was forced to sell down due to my german brokerage account closure. That bucket was most allocated to high quality companies (with the exception of KSB.3.DE, which was more of an opportunistic investment).