Coca-Cola Co's (NYSE:KO) vision is to craft the brands and choice of drinks that people love, to refresh them in body and spirit.
Like them or not, there is no disputing what they have achieved as a company over the decades. Consumers are likely stocked with at least one Coco-Cola product, possibly more.
As an investor, does the stock's performance represent its reputation, and is it worthy of a place in your portfolio?
Below I have the monthly time frame.
From 1987 to 1998, the price increased by 2,300% followed by a 60% decline to the low of 2003. Since then, the price has steadily increased by 246%, trading at $65 today.
In addition to this solid performance, the S&P 500 has dropped over 15% since the start of the year, while KO has risen by a steady 9%, suggesting the stock should at least be on your watchlist if it is not already in your portfolio.
So based on the chart, we know the price has performed well in the past and it is outperforming the indices. The question is, will this stock continue to hand profit to buyers through the rest of 2022?
There are no guarantees, but Coca-Cola's history and performance suggest the odds are very much in your favor if you take a buy position.
This will likely be the case if the indices find support and climb back toward their respective all-time highs, with the $100 mark a realistic target as the next major resistance above the price.
If the indices continue to drop, then the future is cloudier. The price could:
- Continue to work its way up to the $100 price level but at a much slower rate.
- Move into a long-term period of consolidation.
- Drop below the daily 200 simple moving average and weaken to $50 and beyond.
If you already hold a buy position, ensure your risk is well managed and your exit is pre-thought out in case the price starts to drop with the indices.
If you are standing aside waiting for an entry point, you may want to adjust your risk, as we are in suboptimal market conditions. I explain my risk management rules in my last article found here.
If KO is not a consideration based on personal philosophy, that is also fine. There are thousands of stocks to choose from, but ensure the performance and set-up of any stocks you choose are as good or better than KO.
