Archive for February, 2009


Coca Cola Remains Strong Through Tough Times-Seeking Alpha

In an article on on Feb. 22, 2009:

Coca Cola (KO) raised its dividend last week from thirty eight cents to forty one cents each quarter. The most recent dividend will be paid April first to shareholders as of March 15. Coca Cola has raised dividends thirty seven consecutive years. This shows the strength of the brand and company as many recent companies have cut or eliminated their dividend payments to focus on restructuring and raising additional capital. In related Coca Cola news, Pepsi announced a deal to distribute Rockstar energy drinks. This brand was previously distributed by Coca Cola. The details are sketchy and just announced at this point. I believe this is Coke’s decision to let one brand go (Rockstar which most recently lost market share) and bring in one (Monster which is gaining market share). The company recently announced a deal to distribute Hansen Natural’s (HANS) Monster energy drink. The drink is number two in the world behind Red Bull (privately held). Monster is not even available in some European markets and will be distributed by Coca Cola in those new countries. Letting Rockstar go, as I’m assuming is what happened with the new Pepsi deal, furthers my belief that Coca Cola will buy Hansen Natural within the next three years. The exclusive agreement was signed as a long term deal but I think really is just a preview to see what Coke will be buying. Vitamin Water continues to sell well as consumers shift from carbonated drinks to helathier options. The company has great athletes promoting this brand. The company has room to expand with new flavors and new sizes of the drink. I recommend buying shares of Coca Cola below $45 with a target of $60 by 03/01/10. Also recommend buying shares of Hansen below $35 with a long term target of $50 (by a buyout of Coca Cola).

When people look into buying stocks Coca-Cola is the type of company they look for. It is a reputable company as well as a respected company. For the past 37 years it has put its shareholders in front be continuing to raise their dividends each year. In 1997 their dividends sat at just .14 cents. Since 1997 they raised their dividend .01 cent until 2001. Starting in 2001 they raised the dividends .02 cents until 2004. Starting in 2004 they raised .03 cents until 2008. In 2008 they raised it .04 cents and then this year, 2009, they raised it an additional .03 cents. These dividends are very consistent and good to Coca-Cola shareholders. The article goes on to discuss two of the opportunities I have previously discussed. These two opportunities are potential acquistions and bottled water. Coca-Cola is looking into buying Hansen Natural to replace Rockstar who is now being distributed by Pepsi.


Coke CEO: We will be Stronger than Before-Article-Yahoo Finance

Yahoo Finance Article on Feb. 20, 2009:
NEW YORK (AP) — Coca-Cola Chief Executive Muhtar Kent said Friday that the world’s biggest beverage company would emerge from the global financial crisis stronger than it went in. “In a funny way, as I’ve said, there are many opportunities: We will not waste this crisis,” he told financial analysts at the Consumer Analyst Group of New York conference. “We feel we will emerge out of this stronger.” Kent also said advertising dollars are more powerful in this environment, and the company planned to keep spending to promote its brands. “The airwaves are cleaner, the cost of advertising is much lower,” Kent said. “You get much better bang for your buck, in terms of how you reach consumers.” In addition to trademark Coke, the company sells Sprite, Fanta, VitaminWater, Dasani bottled water and Minute Maid orange juice. Atlanta-based Coke launched a new global marketing campaign last month that is running simultaneously with a push by PepsiCo Inc., the second biggest beverage maker. Industry watchers say the ad blitzes are designed to lure American consumers back to soft drinks, a cheap indulgence that appeals to shoppers who want to spend less. “We deliver simple moments of pleasure,” Kent said. Coca-Cola Co. and PepsiCo, based in Purchase, N.Y., both have said their focus will be to turn around the market for soda in North America. Soft drink sales have been in decline for years as consumers grew concerned about the high-fructose corn syrup that sweetened the drinks. The drinks makers hope innovations like stevia-based sweetener will help stem falling sales and eventually bring revenue growth back in line with population growth. Both have also introduced 16-ounce drink sizes to be sold for 99 cents. Shares of Coke fell 35 cents to $42.95 in midday trading while PepsiCo shares fell 45 cents to $51.75.

In this article Kent, Coca-Cola’s CEO, makes an informed decision that they will be able to maintain their current sales. However they are looking into how to make their products more appealing to consumers such as switching out the high-fructose corn syrup to a much healthier substitute. Also Coca-Cola as well as Pepsi has created a cheaper product that would be much more appealing to consumers price wise. One factor that helps Coca-Cola in this time is that they have a great brand. Also I believe that Kent is correct saying that now is the time to use advertising. With other companies that are cutting back on their advertising Coca-Cola can increase the advertisements they put out without increasing their advertising budget. I agree with Coca-Cola’s CEO, Coke will make it through this horrible time but will come out stronger. We just dont know how strong yet!


Board of Directors

Coca Cola currently has 15 members of its Board of Directors. The Board of Directors is elected by the shareholders to oversee their interest in the long-term health and the overall success of the business and its financial stength. Of these 15 members 3 are women. The Board of Directors are very well rounded and I think they are well suited to do the job they are set out to do.

Neville Isdell- Chairman of the Board of Directors, former CEO of Coca Cola
Muhtar Kent- President & CEO of Coca Cola
Herbert A. Allen- President & CEO, Allen & Company Incorporation
Ronald W. Allen- Former President & CEO, Delta Air Lines, Inc
Cathleen P. Black- President of Hearst Magazines
Barry Diller- CEO of InterActiveCorp (IAC)
Alexis M. Herman-CEO of New Ventures, LLC
Donald R. Keough- Nonexecutive chairman of the board, Allen & Company, Inc.
Maria Elena Lagomasino- CEO GenSpring Family Offices, LLC
Donald F. McHenry- Professor, Georgetown University
Sam Nunn- CEO Nuclear Threat Initiative (NTI)
James D. Robinson, III- General Partner RRE Ventures, President JD Robinson, INC
Peter V. Ueberroth- Investor & Chairman Contrarian Group, Inc., Nonexecutive Co-Chairman Pebble Beach Company
Jacob Wallenberg- Chairman of the board Investor AB
James B. Williams- CEO SunTrust Banks, Inc.


Coke’s Mission, Vision, & Values

Their mission, vision and values outline who they are, what they seek to achieve, and how they want to achieve it. They provide a clear direction for their company and help that they are all working toward the same goals.

Our Mission
Our mission declares our purpose as a company it serves as the standard against which we weigh our actions and decisions. It is the foundation of our Manifesto.
* to refresh the world, mind and spirit
* to inspire moments of optimism through our brands and our actions.
* to creat value and make a difference everywhere we engage.

Our Vision
Our vision guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth.
* People: being a great place to work where people are inspired to be the best they can be
* Portfolio: Bringing to the world a portfolio of quality beverage brands that anticipate and satisfy people’s desires and needs
* Partners: nuturing a winning network of customers and suppliers, together we creat mutual, enduring value.
* Planet: being a responsible citizen that makes a difference by helping build and support sustainable communities.
* Profit: maximizing long-term return to shareowners while being mindful of our overall responsibilities.

Our Values
Our values serve as a compass for our actions and describe how we behave in the world
*leaders: the courage to shape a better future
*integrity: be real
* accountability: if it is to be, its up to me
* passion: committed in heart and mind
* diversity: as inclusive as our brands
* quality: what we do, we do well


Coca-Cola’s Functional Leadership

The following are Coca Cola’s executive leadership throughout the world. There are 3 women and the rest of the executives are very diverse. I believe that the current executives are during what is right for the company as well the shareholders.

Muhtar Kent- President and CEO

Alexander B. Cummings- Chief Administrative Officer, Executive Vice President

Jean-Michel R. Ares, Chief Information Officer, Senior Vice President

John M. Farrell- Vice President, Strategic Planning

Gary P Fayard-Chief Financial Officer, Executive Vice President

Rick Frazier- Vice President, Supply Chain

Eddie R Hays- Ph. D. VP Science

Ingrid Saunders Jones- Senior Vice President

Bilal Kaafarani-Senior VP, Research Innovation

Geoffrey J Kelly-General Counsel, Senior VP

Cynthia P McCague-Director Human Resource, Senior VP

Joseph V Tripodi-Chief Marketing and Commercial Officer, Senior VP

Clyde C. Tuggle-Senior VP, Corporate Affairs & Productivity

Jane Ann Westpheling- President Global Business Services


Coca-Cola Earns Gold Medal for Sustainable Development

This was an article posted in Manufacturing Business Technology on Feb. 13, 2009. The article can be found at



In an article from 11/11/2008 in Business Week Online titled Coca-Cola: A Powerful Brand. The article states that they think Coca-Cola’s geographic diversity, powerful brand and product line up will continue to provide value for shareholders throughout an entire economic cycle. Coca-Cola is well positioned to continue growing even through turbulent economic times. The article goes on to state that Coca Cola is likely to offset specific region weaknesses with strength in other geographies. The company sees organic and sparkling beverage growth as key to its success and is pursuing primarily a strategy of bolt-on acquisitions in non carbonated beverages.

The above article shows that the brand is very important for Coca-Cola. Coca-Cola has so much to offer their stockholders. They pay quarterly dividends to their stockholders. The article goes on to state that Coca Cola is a 5 star stock.

February 2009
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