The Coca-Cola Company : Good timing to short
Entry price | Target | Stop-loss | Potential |
---|
US$74.14 |
US$0 |
US$74.5 |
+100% |
---|
Come back to Coca Cola’a stock after a profitable buying strategy.
In the fourth quarter, the group's profitability was impacted by difficult economic conditions and a stronger dollar. The revenue rose by 5.2% to $11 billion, while global volumes increased by 3%.
From a fundamental viewpoint, the company is trading at a high level compared with historical benchmark. Its “enterprise value/revenue” ratio is estimated at 3.76x in 2012 and the price earning ratio is 18.3x for the same period.
In daily data, Coca Cola’s stock moved tightly in tandem with U.S markets. The share increased by 10.4% since mid-february, lifted by a bullish consensus. On the level of USD 74.2 resistance, it seems depleted and the security could fall to USD 70.1.
In this context, investors could take a short position at the current price and fix a stop-loss at 74.5 in order to cover the position.
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