Market Update
U.S Market
- Crude oil futures rallied 3.6% to 49.21 a barrel, gaining for the fourth day in a row
- Dollar retreats from historic high
Business
Nike: solid fiscal 2015 third quarter result
- Double digit revenue grow
- Excluding currency fluctuation 12% growth in rev
- Including dollar appreciate 7% growth
Kraft and Heinz merge to form the world’s largest food and beverage company
- Merger valued around 48 million
- Post-merger revenue around 38 million
Facebook plans to add reservation booking, online order tracking and custom videos on messenger
Stock Pitch: Coco- cola (KO)
Business Overview
- World’s largest manufacturer, distributor and marketer of non- alcoholic beverage
- Produce both carbonated and non- carbonated beverage
- Has 8.4% global market share.
- Its competitor Pepsi Co holds the NO. 6- 3.6%
- Pepsi defend structure as a beverage and snack foods business—- coke is digging deeper into beverages
- Consistent issuance of dividend
Stock Summary
- Dependency on emerging markets, which have become more volatile in recent times
- 2015 will be transitional years—- rewards 2016-2017 onward.
- And since the start of 2007, Coco- cola has outperformed both Pepsi and the S&P 200 on a total return basis, shares of coco-cola are up 113%, while Pepsi is up 94%
Financials
- Net operating revenue 45998
- Stable cash flows- stocks extremely low price volatility
- Carbonated soft drink volumes declined by 3.2%
- Expenses decreased slightly year to year, except AD—3,499-3,266
- EPS grew 5% in both the quarter and the full year
- The revenue has grown from around 8 million
- ROA 7.46; ROE 22.26; Revenue 46.00 B; Net Income 7.10 B; Gross Profit 28.11 B
In the News
- New product- Fairlife milk
- Product of smaller cans, less calorie, sugar 7.5 oz, 90 cal
- Cloud technology
- 30 billion in developing markets around the world over the next five years
- Management expects 2015 to be a “transition year”
- 16% stake in Keurig Green Mountain
Risk and competitor
- Health and wellness concerns
- Raw materials-corn syrup, aluminum, plastic, oranges, water
- Needs to balance risk of new innovation with low growth rates of established products
- Strength of U.S dollar- broad exposure to foreign currencies
- Competitors: PepsiCo (Pepsi) Cadbury Schweppes (Dr. Pepper)