Why was there a sharp sudden drop in price for Coca Cola in Aug 2012 from $81 to $37? The price is averaging around $44. Is it a good stock to buy? Thanks - Seedly
 

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Asked by Anonymous

Asked on 15 May 2019

Why was there a sharp sudden drop in price for Coca Cola in Aug 2012 from $81 to $37? The price is averaging around $44. Is it a good stock to buy? Thanks

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The reason for the stock price is due to a 2-for-1 stock split by the company - https://www.cnbc.com/id/48134915

It is considerably a defensive stock given how it falls under consumer staples. That being said, it's Gross Profit has been decreasing over the years. Fortunately, cost control has been good with the company lowering it's expenses more than the decrease in profit, hence net income is still considerably stable.

Coke's margins are to the left whereas industry average is to the right. Coke can be seen performing significantly better than its peers in the industry.

The latest Q4 results seems rather gloomy with revenue falling 4%. leading to the stock falling by $4+ (~8%)

https://www.cnbc.com/2019/02/14/coca-cola-earnings-q4-2018.html

But if you see the advertising and publicity of coke - through ads + campaigns + Warren Buffett during his AGM (and how he owns this stock also).

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