Coca Cola Enterprises better than the original
Coca-Cola enterprises works alongside The Coca-Cola company to wholesale its products. It buys the product from Coca-Cola (KO) and resells it. Rather than the original company controlling from top to bottom, CCE is able to profit from emerging markets and sell at a discount to the larger manufacturer.
In my opinion, Coca-Cola Enterprises (the distributor) has plenty of exposure to emerging markets which makes Coca-Cola so profitable. While I do like the original manufacturer, I believe that CCE provides a better investment and exposure to the markets around the world. Better yet, CCE is selling at a huge discount from just this January when it topped $27 per share. Though the company is limited in its horizons, particularly due to the fact it must buy from KO to resell to other markets, it maintains hope for growing markets through its wholesale distribution.
In short, CCE provides all the benefits of KO and at a discount. While KO sells at a PE of 21 and a PEG of 1.98, CCE sells for a modest PE of 14.86 and a PEG of 1.76. There is little not to like about CCE, its markets are great, its business is great and its nearly 30% cheaper than it was just a few months ago. Not to mention the chart looks amazing, CCE currently sits on an all important trendline that will cater to its success.
CCE wholesales Coke products to North America, the Great Britain, continental France, Belgium, the Netherlands, Luxembourg, and Monaco. Those are its largest markets though it still wholesales to all markets. As you can see, CCE has much exposure to the Eurozone markets where the currency is hot and benefits from a growing differential between the USD and the Euro.
Heres a chart for good measure:
Coke was one of the original picks that made Buffet a star, and you still have to marvel at their business model. Muddy up some plain old water, add a few bubbles, and sell it for more than gasoline. They’ll be around for a LONG time, making stupendous profits, come boom, come bust