Coca Cola (KO) is a strong stock to hold long term and many investors love its consistency and reliability. Presently it continues to move down in a bearish pattern. For this reason, if you are looking for a few alternatives in the beverage industry there are a couple stocks that you might consider doing for more research on. As for Coca Cola, I do not believe its downward progress is finished just yet.
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Technically Speaking
My general observation of Coca Cola stock has it in a 6 month bearish peak and valley pattern with a couple vaults through support and resistance. It has pushed through the 50 day MA a couple times, but the majority of the time it has remained below it. The RSI indicator is hinting of a slight positive divergence. This last peak is showing a little more strength as it remains above the "50" marker. I am not sure it is enough to push it into a long-term bullish move yet. The MACD is still showing momentum and supports the increased strength as the stock tries to turn its journey around. Having just bounced off the upper Bollinger band, the stock is moving sideways. If it continues in the same pattern, I would expect the stock to start to move down again. We have that double top pattern as we just had in September and October.
So while KO moves down, here are the two alternatives in the beverage industry that look promising as growth stocks in 2013 and may be worth your research.
Sodastream - A Competitor of Coca Cola?
Sodastream (SODA) is a company that's just now coming across many U.S. investors' radar, though it has been around in Europe for decades. It is not new either, being an established corporation with $389 million in sales revenue during the last four quarters, and its shares have been listed on the NASDAQ exchange since November 8, 2010. SODA makes specialized machines and supplies that lets people make customized soft drinks at home and sells in practically every major retailer from Target to Wal-Mart. One of the nice characteristics about the machine is that it offers a variety of sugar free options for those concerned about sugar in soft drinks. It is a very cost effective way to make a soft drink as an alternative to buying Coca Cola or Pepsi (PEP). It has sold more than 2 million home units in a relatively short period of time and has just begun to tap the enormous growth opportunity in America and Asia.
A word of caution: US sales cannot continue growing rapidly per annum, unless SodaStream manages to expand distribution through a larger retail presence. In other words, market participants believe Sodastream sales could be approaching their peak level as the product is already available at Best Buy, Costco and Wal-Mart stores nationwide.
Monster Beverage - A Good buy?
Presently trading at 53.38, Monster (MNST) is being looked upon positively by Stifel Nicolaus as a buy with a price target of $65.00. The stock has had a trying 2012. After an early split and a rise in the value of the stock on rumors of a Coca Cola buyout that never happened, the stock receded. If that wasn't enough, rumors of the FDA investigating deaths linked to consumption of Monster's energy drink contributed to the downward journey. Investors dismissed the possibility of a buyout upon this news. By now it has been assumed that "regulatory concerns are overstated" because the reports can be filed by anyone and do not need to be verified or provide a context of consumption or medical history. The skinny- just rumors and hear-say. Stifel believes the company has great growth potential from where it sits presently.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
