All-Star Analysts 1999 Survey: Beverages
In a year when the Real Thing took a beating, timing was everything.</br></br>Many beverage analysts were caught flat-footed when Coca-Cola's growth rate started to fizzle because of turmoil in overseas markets. Coca-Cola, a perennially popular stock, rose 33% from January to July and then lost nearly its entire gain in the second half of the year. The company's 1.4% gain for the year, including reinvested dividends, helped depress the overall return for many a stock picker.</br></br>Unless you were Timothy Swanson, a 32-year-old analyst for A.G. Edwards in St. Louis. Mr. Swanson was able to catch the wave of buoyant optimism for Coca-Cola in the first half of the year, before cutting his rating in mid-July, capturing a nifty 31% return. And in August, when many investors were bailing out of the stock of Coca-Cola Enterprises, the company's largest bottler, Mr. Swanson saw it as a cheap buy, riding that stock for 36% before jumping off.</br></br>As a result, the three-time All-Star's 36% estimated overall return easily trumped the 11% median return for the 14 analysts evaluated in the survey.</br></br>To a great extent, Mr. Swanson's calls were based on macroeconomic trends. With one international economy after another falling into recession, he felt that Coca-Cola, which gets 75% of its earnings from foreign markets, was too vulnerable. "It had a great run, and it was time to take a respite," says Mr. Swanson, who likes to compete in triathlons.