Coca-Cola Stock Forecast: Stock Gains Since Bullish Algorithmic Forecast

Coca-Cola Stock Forecast: Stock Gains Since Bullish Forecast

The Coca-Cola Company (KO), founded in 1892, is the world’scoke largest soft drink maker. It sells more than 3,500 products worldwide. On November 6th, I Know First published an article titled “Coca Cola – Undervalued: Stock Valuation Using A 10-Year Cash Flow Projection And Algorithmic Analysis” on Seeking Alpha. The I Know First algorithm had a signal strength of 10.25 and a predictability indicator of 0.28 for Coca-Cola in the one-month time horizon.

The article claimed, among other things, that decreased demand for carbonated drinks would not affect Coca-Cola. The author’s argument was that the company was adaptable and able to adjust according to consumer preferences, and that they would most likely try to enter into new drink markets. This has proven to be true, as the company has announced that they purchased a 10% stake in Keurig Green Mountain, Inc. and are planning to purchase a 16.7% stake in energy drink maker Monster Beverage Corp. They also released their newest low calorie beverage, Coca-Cola life, which is different from its other low calorie drinks because it doesn’t use the artificial sweetener aspartame and instead uses a blend of cane sugar and stevia leaf extract for sweetness. However, their new beverage with the potential to make the biggest impact is a product called Fairlife. It is a new kind of milk that will sell for twice the value of normal milk. The milk doesn’t contain lactose, and it has 50% more protein and calcium than regular milk, as well as 30% less sugar. The company claims this is the premiumisation of milk and has the potential to create massive new revenue.

KO

 

These new drinks have helped Coca-Cola stock increase like the algorithm said in the original article. The above figure is a forecast from the mega-cap stocks package made on November 2nd for the one-month time horizon titled Blue Chip Stocks: Up To 8.02% Return In 1 Month. In this forecast, Coca-Cola (KO) had a signal strength of 19.02 and a predictability indicator of 0.31. In accordance with the algorithm, the stock gained 7.09% over that time.

While the demand for carbonated drinks is decreasing, Coca-Cola’s global reach, strong brand power, expanding international presence, a solid global bottling network and an impressive cash position means that it is still a strong asset with steady growth and dividend returns. Their entry into new markets shows their adaptability to consumer needs.