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2/13/2013

I Bought Coke And Sold NYSE Euronext Yesterday

Stocks I Bought and Sold Yesterday

Yesterday was an active trading day for me. I sold 90 share of the diversified investment group NYSE Euronext (NYX) at $36.50 and bought 100 shares of Coca Cola (KO).

No further fantasy for NYSE Euronext Shares

I sold NYX shares because the stock price is around 10% over the takeover price announced by the IntercontinentalExchange (ICE). I believe that it could be possible that another exchange could start a second offer and overbid the current price. So my sell-off was only a part of my full position. With the rest I could benefit from a higher offer. However, fantasy with the NYX is over. I don’t see any growth perspectives if the deal passes through. ICE, CME and BOCE are more interesting now.

My whole NYX stake was up around 40% and I like to hedge these gains. Now, everything is nearly safe and my big risk in this position is off.
In addition, I bought some shares of Coca Cola and increased my stake by a significant number. KO was the best performing of my core holdings over the recent years but compared to the other stocks I own, it is still an underperformer.

Cocal Cola is down, but long-term still a buy

KO was down 2.72% yesterday. The earnings results were solid but the market expected more. I don’t really care about the current price levels and quarter reports. They change too fast. I am a long-term investor. I bought several times KO shares and increased my position every time at a higher rate. That’s not a good choice but if my portfolio grows, I need to increase the total amount of my safe heaven core holdings.

I love stocks with very long dividend growth, a trustful managements and solid market positions in several markets worldwide. KO is definitely not cheap. The EV/EBITDA ratio is at 14! The yield is still acceptable at 2.72%. I expect that the yield should climb over 3% with the next dividend hike.

I have several beverage stocks and they all have a very high valuation. I don’t know why but in the market is a huge fight about big companies with strong brands and distribution power.

Companhia de Bebidas Das Americas offers a higher risk

Companhia de Bebidas Das Americas (ABV) is an aggressively buying company in the brewing industry. They lend huge amounts of debt to buy the biggest brewers in the world. I don’t like those offensive strategies, especially when they pay prices at 14x of the EBITDA, but they are somehow successful and the stock price explode. Coke is not cheap but solid. I believe that it should be possible to realize a yearly long-term return of 8% or more.

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