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

To: Dulane U. Ponder who wrote (1284)	10/9/1998 12:58:00 PM
From: Paul Shread	Respond to of 1462

DP, Actually, KO has warned twice in the last 15 months, as I'm sure you are aware, so I would count that as a miss. And it's never missed in the 90+ years it's been public? I can't believe that. What is the historical range for its valuation (i.e., PE range of 12-65, where's the average)? I like the company, they've done a good job managing through crises, but it is overvalued by 100%, so why not wait a couple of years to buy it? Who knows what will happen to markets and the economy in that time? I'm not hoping for disaster, just trying to invest wisely. Paul P.S. One of the findings of Jeremy Siegel's study of the nifty fifty from 1972 is that stocks with PEs lower than 30 generally outperformed the S&P over the next 25 years, while those with PEs greater than 30 did not.

To: Dulane U. Ponder who wrote (1284)	10/10/1998 5:56:00 AM
From: Investor-ex!	Read Replies (3) \| Respond to of 1462

Hi Dulane, Here's KO's numbers, all from First Call: Earnings surprises: 12/96 -$0.01 03/97 +$0.01 06/97 +$0.01 09/97 -$0.01 12/97 -$0.01 03/98 $0.00 06/98 $0.00 KO has missed earnings three times over the past seven quarters, though through adept financial engineering, the amounts by which they've over/under-shot their "final guidance" is immaterial. P/E ~40 this would be OK (for KO) if growth was ~20%+, but it's not P/S ~8 won't even comment on this Projected 5 yr growth rate = 7% With 1998 earnings, the projected growth rate indicates KO should be priced at ~$10 (seven times 1998 earnings). Throw in an extremely generous 150-200% premium for KO's brand-name and current market-share and something approaching reasonable value (for KO) would be maybe $25-30/sh. In 1997, KO earned $1.64/sh In 1998, KO expects $1.46/sh, a decline of 11% over 1997 In 1999, KO expects $1.60/sh, (this might be too high) One should never sell or sell short based on valuation alone. Have a nice trade!