David Winters Publishes Year-end Letter, Commenting on The Coca-Cola Company

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Mar 14, 2010
David Winters, chief executive officer of Wintergreen Advisers LLC, has published his 2009 Letter to shareholders. Among other things, he commented on one of his holdings The Coca-Cola Company:
An example of a portfolio holding with great diversification is The Coca-Cola Company (KO, Financial). As widely recognized as the red and white logo on Coca-Cola bottle and cans in the U.S., the Coca-Cola brand is equally recognized in virtually all countries around the world. We all know just what we are getting when we purchased a Coke. We are getting the same soft drink whether we are in Boston, Beijing, or Buenos Aires. For the company however, revenues are in currencies other than the U.S. dollar for every bottle or can sold outside of the U.S. The company is participating in broad based worldwide economies and is being paid in a collection of diverse currencies. This is a amazing benefit to the company and its shareholders. The world is rebounding from the recent global economic crisis at differing paces and with various degrees of enthusiasm. As one currency or economy slows down or stays flat, another in likely to be strengthening. Coke is not limited by what is happening in any single country or market, nor are they limited by the sale of only one cola beverage.


The old adage “don’t put all of your eggs in one basket” has been followed by Coke. Coca-Cola has over 3000 beverages in its product portfolio. Coke is a leader in global sales of juice, ready-to-drink coffee and tea, sports drinks, and sod pop brands in addition to Coca-Cola Classic, Minute Maid, Vitamin Water, Powerade, and Dasani are among the well-know Coca-Cola brands that are sold in many countries. This gives the company diversification of both product and currency. Coca-Cola’s strong worldwide business is supporting not only a dividend yield of approximately 3%, but alss the ability to reinvest in the business gloabally at high rates of return. In our opinion, Coke’s potential for growth, paired with its current yield and wonderful management, make us view it as a first class investment for the long run.


Also, David Winters recently talked with Bloomberg's Pimm Fox about his investment strategy: