The Coca-Cola Company
) hit a 52-week high of $41.57 on Jun 18 after rumors spread about
it going private.
Reports of a possible takeover of the cola giant by billionaire
investor Warren Buffet's company,
Berkshire Hathaway, Inc
) sent the company's share price higher. Berkshire Hathaway is the
largest shareholder of Coca-Cola.
David Winters, chief executive and portfolio manager of
Wintergreen Advisers, another stake owner in the U.S. drinks
company, reportedly wrote to the company's board that he feared
that Buffet was plotting to take the company private in a
"sweetheart" deal. However, Buffet denied the allegations saying
that there is "absolutely no chance" of buying Coca-Cola.
Coca-Cola shares also gained momentum on Jun 18 after Reuters
reported that the company plans to start production at five
factories in Egypt and Pakistan over the next year and a half. The
effort is expected to grow sales in double-digit percentage range
in both the markets this year.
Coca-Cola's Middle East and North Africa president told Reuters
that the company plans to open three plants for sparkling drinks in
Karachi, Multan and Islamabad in Pakistan. The other two factories
will be opened in Egypt over the next 18 months.
Coca-Cola products enjoy stronger demand in emerging and
developing countries which help it offset softer demand in the
developed ones. Coca-Cola is showing keen interest in countries
like Latin America, India, Russia and China, encouraged by growth
opportunities that these countries provide. In 2013, around 60% of
the company's revenues were generated outside the U.S.
In India, Coca-Cola has already invested over $2 billion in the
last 18 years with plans to invest another $5 billion by the end of
2020 to build consumer marketing, infrastructure and brands in the
country. Further, Coca-Cola plans to invest $8 billion in China
over the next six years to build plants, distribution, coolers,
brands and equipment. The Cola giant also plans to invest $3
billion in Russia between 2012 and 2016, $8 billion in Brazil
through 2016 and $300 million in Vietnam between 2012 and 2015.
Other Stocks to Consider
Coca-Cola carries a Zacks Rank #4 (Sell). Better-ranked beverage
The WhiteWave Foods Company
Dr Pepper Snapple Group, Inc.
). Both the companies carry a Zacks Rank #2 (Buy).
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