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Strategies & Market Trends : WILL COCA-COLA ALWAYS GO UP? -- Ignore unavailable to you. Want to Upgrade?

To: jethro who wrote (1144)	7/13/1998 12:41:00 AM
From: John O'Neill	Respond to of 1462

Consider the following Motley fool news item comparing Yahoo to KO. (One big difference is that Yahoo does have a staggering potential whereas KO makes sugar water with caffeine (it used to be Cocaine before that became illegal) and juice drinks etc. Furthermore, KO's "deals" are with junkfood restaurants like Mc Donalds..what a great thing for the kids of the world to receive from the U.S.,junk food, sugar& caffeine. I have a 4 year old & think it's disqusting to see parent routinely taking kids in for that cheap fare. IMHO KO may continue too rise, but I think it is GROSSLY overvalued this is the article under YHOO news July 13 America Online's ad/commerce run-rate is about $500 million a year. Though Yahoo! is far behind AOL in that area, its reach seems comparable. Imagine, then, that Yahoo! can do $1 billion in revenues by 2001 with Intel-like operating margins of 50%. Assume a 35% tax rate, and the company would deliver $325 million in net income. Divide that by 65 million shares and you get $5 in earnings per share. Now paying 36 times guesstimated FY01 earnings may not sound like a smart move. In fact, I wouldn't do it. But it's not in any simple sense ludicrous. Indeed, it's about what Coca-Cola (NYSE:KO - news) trades for today. CONFERENCE CALLS Please see the Motley Fool's