Down 14%, Is It Time to Buy This Top Warren Buffett Stock Before 2025?
Given his fantastic track record raising capital as CEO Berkshire HathawayWarren Buffett is an investing legend, and it makes sense that both professional and amateur investors keep a close eye on his portfolio for potential new ideas to allocate their money to.
Among the dozens of companies owned by Buffett, there is one peak drink stock which has fallen in recent months and is now trading 14% off its all-time high in September.Does this mean it’s time to buy this business before 2025?
Berkshire Hathaway and Warren Buffett owned a stake Coca-Cola (NYSE: KO) for nearly four decades. Today, it represents 8.4% of the conglomerate’s public stock portfolio.
Coca-Cola carries with it a sustainable competitive advantage brand name. With a presence in more than 200 countries and territories worldwide and a 40% market share in the non-alcoholic ready-to-drink industry, the business is highly valued by consumers who have come to trust the consistency of Coca-Cola’s offering.
An important characteristic that Buffett considers is if a company has the ability to consistently raise prices, otherwise known as: pricing power. Coca-Cola fits the description Last quarter (Q3 ended September 27), unit volume was down 1% year-over-year, but was offset by a 10% increase in prices ability to fight pressure by asking customers to pay more over time Many companies are not so lucky.
Besides, Coca-Cola is extremely profitable. Its operating margin has been an excellent 26.8% over the past decade, showing how much of its sales base flows to the bottom line.
All of these positive attributes are probably the main reasons that Berkshire has been a longtime shareholder in Coca-Cola. I would also argue that the fact that this is such a boring business also contributes to Buffett’s positive view. that the company will fail soon, if ever.
In other words, there is no risk of obsolescence, which can be seen as a positive in today’s fast-changing and technological economy.
Coca-Cola may dominate the global beverage industry, but that doesn’t mean it’s been a winning investment. Over the past five and 10 years, the stock has delivered total returns of 33% and 105%, respectively. These numbers seriously lag behind the wider range S&P 500:performance in those two sections.
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