Buying a Coke for the Value Portfolio
Market Shadows’ Virtual Value Portfolio pulled the trigger and purchased 107 shares of beverage giant Coca-Cola (KO) this morning at $37.27 per share.
The $3,988 investment amount came out of our cash reserve fund.
KO is a conservative position with a greater than 3% dividend yield. We expect to see an increased payout announcement in the near future.
Risk appears low as the absoulte and relative Price to earnings ratios are both near the low points of the past 15 – 20 years. While the company’s rate of growth has slowed, its fundamentals have never been stronger.
We had previously traded Coca-Cola here for a nice profit. We bought on Jan. 28, 2013 before selling on May 16, 2013. That captured a 17.4% gain in less than four months (not including the quarterly dividend received). There will almost certainly be another chance to sell KO at a much higher price than today’s quote.
