The share price is definitely hugging $12. It is uncanny.
Still concerned by the high p/e of over 20 though. When the stock was $15 its p/e would have been much higher again.
Too many competitive issues at the moment for the p/e to stay at 20 and I think the share price should go a bit lower to accommodate these issues. Schweppes/Pepsi have been unrelenting in their price war so there has been damage to Coke's franchise and competitive position/profits (even though it is the dominant market player). 'Pepsi Next' is a smart product too, with 30% less sugar than regular Pepsi. This Pepsi product has much less sugar but still tastes like regular full-strength Pepsi.
The Indonesians may well see this big Aussie/American brand as an outsider. They may think the infidels are force feeding them their liquid sugar. Spying on their President and his wife probably wasn't that smart as well.
As I've said previously I do think Indonesia is a smart growth option. Maybe the Indonesians will find themselves guzzling more Coke as time goes on and enjoying some extra kgs too! As an aside, a good trick with Coke is to drink full strength then temporarily switch down to the diet varieties when your legs start rubbing together.
By the way FB, I've got a 'bone' to pick with you. Why do you happen to be so into the same toy stocks I follow - MTS, CCL, WOR, BKL, QBE - when I take an 'opposite' bottom feeding value approach. If you wanted to short stocks wouldn't it be better to target overvalued stocks that have already fallen and haven't had one or more downgrades like all of these. Do you see further downside in these?
They could all probably fall further but I would guess that they have all (except QBE) significantly dropped already. To me, the big drops that have already occurred limit these shares falling further (if that makes sense). That's why I think shorting these may be an unusual strategy. Why not go for bigger fish? The market is heavily valued so there must be overvalued stocks or commercially challenged stocks ripe for the picking. QAN is an example?
CCL Price at posting:
$11.95 Sentiment: Sell Disclosure: Not Held
