Sometimes, hidden gems are in fact gems, but they’re not hidden. If any hiding is occurring, it’s in plain sight. From a different perspective, market participants don’t always have to venture far off the beaten path to find rewarding stocks that don’t command much attention.
There are no sector-specific rules for finding high fliers who aren’t big headline-makers. Still, some market participants might argue that, given some companies’ enviable brand recognition, the consumer packaged goods space isn’t a goldmine of monster stocks largely glossed over by investors.
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Coca-Cola Consolidated (NASDAQ: COKE) proves otherwise, though it’s certainly worth the monster stock label. It’s time to pour into this stock and explore just how much fizz it’s got.
As its name suggests, Coca-Cola Consolidated is related to Coca-Cola, the world’s largest soft drink manufacturer, and a stock with which scores of investors are familiar. Consolidated is the largest independent bottler of Coca-Cola products. Hence, it was once known as Coca-Cola Bottling.
For investors who aren’t familiar with the bottler, it’s an independent company, and the stock isn’t the result of a spinoff. In fact, Coca-Cola doesn’t own a stake in the bottler because Consolidated purchased all of the beverage giant’s equity interest last November in a $2.4 billion transaction. Talk about a sweet deal. The per share purchase price was $127, or far below Coca-Cola Consolidated’s March 2 closing price of $206.38.
Regarding the bottler’s share price, the chart below confirms a few points. First, this has been a multibagger. Second, it’s a consumer staples stock that’s crushed the sector and shares of the company for which it bottles drinks. Third, a five-year run in which it’s trounced the Nasdaq-100 index suggests this stock has acted more like a growth name than a consumer defensive stock.
This stock’s jaw-dropping ascent is rooted in solid fundamentals. In the fourth quarter, the bottler posted gains in income from operations, gross profit, and net sales. Importantly, Coca-Cola Consolidated isn’t dependent on volumes tied to just Coke Classic and Diet Coke. Yes, those are two of the top five sodas measured by sales. Still, Consolidated highlighted strong fourth-quarter trends for brands including Core Power, Dasani, and Monster, among others, indicating the bottler is benefiting from Coca-Cola’s expansive portfolio.