the coca-cola company - company evaluation and analysis

Proudly Presented by:Chee Zhong Xian, Han Chuin Chi, Kenneth Ho, Jodie Wong, Peh Yong Sheng

Finance Group Project

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CompetitorComparisons

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction

Peer Competitors

Stock Analysis

Beta Analysis

Conclusion

OUR SCOPE

1What was Coca Cola first sold as?a) A sleeping draughtb) A nerve and brain tonicc) A hang-over cured) Poison

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

IT’S TRIVIA TIME!

1What was Coca Cola first sold as?a) A sleeping draughtb) A nerve and brain tonicc) A hang-over cured) Poison

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

IT’S TRIVIA TIME!

Company Background

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Peer Competitors

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Beverages BeveragesBeverages & Snacks

40% Market Share

30% Market Share

16% Market Share

2012 revenues $48.0B USD

+3.2% above 2011 results.

2012 revenues $65.5B USD

-1.5% below 2011 results.

2012 revenues $6.0B USD

+1.6% above 2011 results.

2IT’S TRIVIA TIME!

What does the name "Coca Cola" mean in Chinese?a) Cold and freezingb) Happiness and Blissc) Cold and thirstyd) To make mouth happy

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

2IT’S TRIVIA TIME!

What does the name "Coca Cola" mean in Chinese?a) Cold and freezingb) Happiness and Blissc) Cold and thirstyd) To make mouth happy

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Prices (Coca-Cola)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

US$52.65

US$86.10

150% Increase

Average Monthly Returns = 0.88%

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

US$26.32

US$43.05

Average Monthly Returns = 0.88%

150% Increase

Analysis of Historical Stock Price (KO)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

1. Election of 2 Board Officers

2. Lehman Brother’s Bankruptcy (Subprime crisis) & Recession

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

Analysis of Historical Stock Price (KO)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

1. Attempted hack into Coca Cola’s computer

systems

2. Debut of “PlantBottle” & Recovery

Analysis of Historical Stock Price (KO)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

1. Deal signed with Sony to promote PlayStation Move

3IT’S TRIVIA TIME!

How long has Coca-Cola been around?a) 127 Yearsb) 200 Yearsc) 900 Monthsd) 6300 Days

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

3IT’S TRIVIA TIME!

How long has Coca-Cola been around?a) 127 Yearsb) 200 Yearsc) 900 Monthsd) 6300 Days

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

1. Coca-Cola’s constant investment in China

Analysis of Historical Stock Price (KO)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

1. Make known intention to venture into Myanmar

2. Announcement of Stock Split

Analysis of Historical Stock Price (KO)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Historical Stock Price (KO)

1. Coca-Cola takes active role in global obesity

problem

2. Mexico imposes tax on Junk Food

4IT’S TRIVIA TIME!

How long would it take for you to try all the beverages made by Coca Cola if you drank one per day?a) 3 monthsb) 9 Yearsc) 25 daysd) 3 years

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

4IT’S TRIVIA TIME!

How long would it take for you to try all the beverages made by Coca Cola if you drank one per day?a) 3 monthsb) 9 Yearsc) 25 daysd) 3 years

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Comparison of Coca-Cola with Peers

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Coca-Cola (KO) & Dr Pepper Snapple Group (DPS)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

KO stock prices have risen close to 170%

DPS stock prices have risen close to 209%

Analysis of Coca-Cola vs Dr Pepper Snapple Stock prices

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

1 Investors have strong confidence in DPS.

2 DPS was more badly affected by the 2008 financial crisis than KO.

Very sharp jumps in DPS’ stock price in 2010.3

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Coca-Cola (KO) & PepsiCo (PEP)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

This signals strong performance of both companies with an increase of share price.

Coca-Cola (KO) & PepsiCo (PEP)

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Trend diverges in Q3 2013

PEP achieving a lead of 10% as compared to KO

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Analysis of Coca-Cola vs PepsiCo Stock prices

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Counters shift towards healthier drinks with diversification to food products.

Expanded distribution in China and did aggressive marketing by employing Chinese artiste ambassadors.

Research centre to develop new products and tailor products to Asian preferences.

5IT’S TRIVIA TIME!

Which is the second most widely understood term in the world?a) okb) yesc) Coca Colad) hello

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

5Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

IT’S TRIVIA TIME!

Which is the second most widely understood term in the world?a) okb) yesc) Coca Colad) hello

Beta Analysis

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Beta Analysis

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Coca-Cola Dr Pepper Snapple Group

PepsiCo

0.4149 0.6816 0.3906

Middle Highest Lowest

Moderate systematic risk (relative)

Largest systematic risk

Smallest systematic risk

Stable and with little fluctuations

Steeper stock price drop during recession

Attractive to conservative

investors

β

Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

Introduction Peer Competitors Stock Analysis Competitor Comparisons Beta Analysis Conclusion

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CONCLUSIONCoca-Cola is a stable company and is less prone to systematic risk.

2 PepsiCo is a strong rival with a more diversified portfolio, popular with the new generation.

3 Dr Pepper Snapple Group offers healthier choices and is growing strong.

Coca-Cola must keep up with market trends & stay above the competition for investors to

have more confidence in its stocks.

Chee Zhong Xian, Han Chuin Chi, Kenneth Ho, Jodie Wong,

Peh Yong Sheng

Thank You