Momentum Stock: Coca Cola Femsa

Coca-Cola FEMSA SAB de CV, listed on the New York Stock Exchange as KOF, is the largest franchise bottler of Coca-Cola products in the world. The company produces and distributes Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages of The Coca-Cola Company across a broad geographical region, which includes countries in Latin America and the Philippines. Its operations encompass procurement and manufacturing processes, commercialization and distribution of beverages.

Pricing Analysis

KOF's current price stands at $88.57, showcasing a commendable performance over different time horizons. Over the past year, the stock has delivered a substantial return of about 57.79%. Even more impressively, it has surged by approximately 1080.95% since its inception. Given the stock's Relative Strength Index (RSI) of 64.23, it may be slightly overbought in the short term, but this is not necessarily a cause for concern.

Financial Highlights

The company has a sizable market capitalization of roughly $18.79 billion, with an EBITDA of about $39.35 billion. Currently, KOF has a high P/E ratio of 95.1, suggesting that investors are willing to pay a high price for its earnings, potentially due to optimistic future growth expectations. Its PEG ratio also stands high at 20.28, indicating the stock might be overvalued when factoring in the company's growth rate. It is important to consider these ratios in the context of the industry averages and the company's growth prospects.

KOF's dividend per share is $58, yielding a dividend yield of 0.0368, which may be attractive to income-focused investors. The company's profitability margins are also healthy, with a profit margin of 8.61% and an operating margin TTM of 12.79%.

Valuation Metrics

KOF's trailing P/E is high at 95.1, but the forward P/E is significantly lower at 14.64, indicating that analysts expect strong earnings growth moving forward. The Price/Sales ratio TTM is 0.0633, suggesting the stock could be undervalued given the company's sales. The company's Enterprise Value stands at approximately $15.72 billion, a number below its market cap due to its negative net debt.

Share Statistics

KOF has approximately 210 million shares outstanding with a float of 52.52 million shares. Nearly 4.78% of the shares are held by insiders, and institutions hold about 58.88% of the shares, indicating a high level of institutional confidence in the company.

Technical Analysis

The company has a relatively low beta of 0.79, indicating that the stock is less volatile than the market. KOF's 52-week high is $91.23, while its 52-week low stands at $49.86, suggesting the stock has been on a strong upward trajectory over the past year.

Dividends and Splits

KOF offers a forward annual dividend rate of $3.25 with a yield of 3.68%, and the payout ratio is 60.91%, indicating the company is returning a significant portion of its earnings to shareholders. The company's track record of dividends shows regular payouts, indicating consistency and potentially making it an attractive option for income investors.

Analysts Ratings

Among the analysts covering KOF, four have given it a "strong buy" rating, two have recommended a "buy," while six analysts suggest holding the stock. None of the analysts have recommended selling the stock, indicating a generally positive sentiment towards the company. However, the average target price of $83.8 is below the current stock price , suggesting that analysts, on average, believe the stock may be slightly overpriced at the moment.

Institutional and Fund Holders

Significant institutional stakeholders in KOF include the Gates Bill & Melinda Foundation, Tweedy Browne Co LLC, and Renaissance Technologies Corp, which hold 2.96%, 0.92%, and 0.52% of total shares, respectively. On the other hand, leading fund holders like Tweedy Browne International Value Fund, Seafarer Overseas Gr and Income Instl, and Robeco QI Emerging Cnsrv Eqs I €, hold 0.65%, 0.29%, and 0.23% of total shares, respectively. These holdings, especially from prestigious institutions and funds, can be seen as a vote of confidence in the company's prospects.

Outlook

In summary, KOF appears to be a strong company with solid financials and a consistent track record of dividend payouts. The positive analyst sentiment, robust growth over the years, and substantial institutional ownership further bolster the stock's appeal. However, investors should be mindful of the relatively high P/E ratio and the possibility of the stock being overpriced. Additionally, the company's stock performance should be viewed in the context of its peers and the broader market conditions. As always, potential investors should conduct thorough research and possibly seek advice from financial advisors before making an investment decision.

In terms of any kind of short term entry, I would want to wait for a pullback to below an RSI of below 45 or so as it does pull back a long way with an indication of the uptrend continuing in order to get better value. For risk management, a trailing stop loss of around 15% would have kept you in most of this trade. If it broke below that it could have been a good sign to exit and look for a new entry when the trend resumed.

As always how you interpret and decide to act on any results is up to you. This is just data not financial or trading advice and past performance is in no way any guarantee of future performance. Think of it as a way to spot stocks you might be interested in and can add to your watch list and perform further research on and or discuss with your broker.

Again. Not trading advice. Industries and companies change. Trends can end. Do your own research / discuss it with your advisor, but might be one to watch.