Two Ways To Play: Coke Fizzes Over Huiyuan Juice

Terry Woo  Sep 03, 2008 8:50 am

Two Ways To Play: Coke Fizzes Over Huiyuan Juice
 
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Coke Buys Huiyuan Juice

Bloomberg reports Coca-Cola (KO) agreed to buy China Huiyuan Juice Group for $2.3 billion. The acquisition potentially doubles Coca-Cola’s share of China’s fruit-juice business and would mark the largest foreign takeover of a company in the Asian country. The deal shows foreign companies still see value exposure to China, which has the world’s worst-performing stock market year-to-date.

Coca-Cola has said it expects more than 80% of future growth to come from non-U.S. markets including China, where sales by volume rose 18% last year. The purchase is still subject to regulatory approval.

From the Bull Pen: Pepsi (PEP) may be the better upside play, although the stock was stuffed at its 200 DMA ($70). Those bullish can wait for entry should the stock pull back to $68. Sell stops can be set below.

From the Bear Cave: We’ve talked about the loss of a tailwind for KO because of the rally in the dollar. Buy stops can be set above $54 on downside tries.


Sony’s Blue (Da Ba Dee)

Bloomberg reports Sony (SNE) unveiled eight new Blu-ray video-disc recorders and players, which will be available in time for the holiday season on the Japanese market. The world’s largest consumer electronics maker said in a statement today six recorders priced from 110,000 yen ($1,009) to 280,000 yen will be available from Sept. 27, while two players will be sold from Dec. 6.

The company forecasts industry sales of 7 million Blu-ray recorders and players worldwide in the 12 months ending in March, tripling the 2.1 million sold a year earlier. Further, Sony reiterated its prior forecast of selling 3.1 million Blu- ray players and recorders, which would be equivalent to a 44% market share.

From the Bull Pen: Is the better upside trade in Apple (AAPL)? Bulls can play the upside, sell-stops set below $165.

From the Bear Cave: Blu-Ray? Good news, but bad chart. Past support is now resistance, and bears may initiate a downside position if and when SNE stock rallies to $40. Buy stops above that mark.

For more ideas in real time throughout the trading day, check out Minyanville’s Buzz & Banter.


Quick Check Around the World

Asian trading closed with the Hang Seng -2.17%, Nikkei +0.64%, Taiwan -1.71% and Shanghai -1.22%.

A quick check of Europe finds the CAC -1.54%, DAX -0.87%, FTSE -2.06%

As of 8:30 AM EST, S&P Futures are lower -5.3 points to 1271, and Nasdaq futures are down -9 points to 1842.


A Look At Commodities

Crude oil is weak again, down -1.91 to 107.78. Gold is off -8.50 to 798.10. Silver is lower -0.250 to 12.80, and copper is higher +2.20 to 334.45.

The dollar index is higher +0.287 to 78.344.


On the Radar

Economics

10:00 Factory Orders: 1.0% cons.
2:00 Fed’s Beige Book

Already Hump Day! Good luck!
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Comment (1) See All Comments »
09-03-2008, 2:53 pm
This is a move by Coke to extend its existing business. But it ignores the competitive problems Coke has in existing markets - as well as expected competition in China. There is no innovation here, just "more of the same", which has all
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