Making good stock investments may seem like an unattainable dream. There are so many stocks clamoring for attention that deciding which ones are worth the risk presents a complex challenge. Whether you are a new investor looking to enter the market for the first time, or you just want to brush up and sharpen investment skills, take advantage of reliable learning tools available for free online.
As with any investment, you need to examine a potential stock from all possible angles. No matter how big the name is or how popular the stock, it may not be right for you. Evaluate it based on your personal financial goals, your desire to hold stocks for the long term or short term, and your available budget.
Coca-Cola is a well-known global brand that has been a component of the Dow Jones Industrial Average for more than 25 years.3 A closer look at Coca-Cola stock reveals some pros and cons to keep in mind when deciding whether or not you will buy.
The Investment Cons
• Coca-Cola’s last quarter earnings may not inspire confidence. Net revenue was down compared to the other quarters combined. Many investors were scared off by this drop as earnings per share fell more than 10%, with a decline of 1% in volume in the U.S. Some of these results can be attributed to the effects of global currency fluctuations, as few companies have a broader worldwide presence. Some can also be attributed to the public’s waning interest in sugary drinks. However, competitors in this space remained strong, which leaves one to wonder where the problem lies.1
• Coca-Cola’s plans for the future include investing in other energy drink companies, while at the same time implementing a cost-cutting plan to boost productivity. It is unclear what will be the likely success of these efforts, and their overall impact on revenue and profitability.
• The price to gain access to Coca-Cola shares is more affordable than before, but it still carries a hefty price tag, currently trading for a price-to-book value of 5.42.2
• Coke is projected to show EPS of $2.03 for the full year 2014, down from 2013 at $2.08.2
The Investment Pros
• Coca-Cola boasts a highly stable track record over the long haul.
• Coca-Cola is established and has strong brand awareness in the global marketplace, including the higher growth emerging markets.
Whether or not you invest right now is a choice you have to make after careful research. Even knowing all you can about one company’s financial picture, you need to know the risks of entering the stock market. It rises and falls every day, often subject to unanticipated fluctuations in global currencies, political unrest, and other economic forces.2
Before you invest your money, contact Drive Wealth Education to learn more about evaluating stocks, so you can make an informed, sound decision.
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1. http://www.thestreet.com/story/13039617/1/what-to-expect-when-coca-cola-ko-reports-earnings-results-tomorrow.html
2. http://247wallst.com/consumer-products/2015/02/09/what-to-expect-from-coke-and-pepsi-earnings/
