Mmmmmmm, Coke

John Ransom | August 15, 2014 2:00 PM

Welcome to John Ransom’s Stocks in the News where the headlines meet the trendlines.

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Stock number one: Monster Beverage Corporation

Monster Beverage shares soar 30% after Coke deal announced—The LA Times:

Shares of energy drink maker Monster Beverage Corp. got a jolt after Coca-Cola Co. agreed to take a minority stake in the Corona company.

Monster shares soared $21.66, or 30.23%, to $93.31 Friday morning, a day after the deal was announced after the close of trading. The companies said Coca-Cola will take a 16.7% stake in Monster, as part of a $2.15-billion all-cash deal.

Symbol: MNST

Trailing PE: 43; Forward PE: 31

PEG: 1.79

Dividend: NA

Estimate Trend: Up

Ransom Note Trendline: Buy on a Pullback Under $85

Stock number two: James Hardie Industries plc

James Hardie Q1 profit slides 80 pct, warns of slower US recovery --Reuters

James Hardie Industries PLC , the world's biggest fiber cement products maker, on Friday posted an 80 percent fall in fiscal first quarter net profit and revised down its full-year earnings due to an uncertain U.S. economic recovery.

Symbol: AIRM

Trailing PE: 274; Forward PE: 97

PEG: NA

Coca-Cola posted mixed results for the second quarter of 2014, beating the Zacks Consensus Estimate for earnings but slightly missing the same for revenues. Earnings of 64 cents per share increased 1% year over year driven by improved sparkling beverage volumes, price/mix gains, strong international volumes and better gross margins which made up for higher commodity and marketing costs. Organic revenues grew 3% driven by better volumes.

However, what caught investors’ attention was an improvement in the volumes of Coca-Cola’s sparkling beverages, especially its namesake brand.

Symbol: KO

Trailing PE: 22; Forward PE: 19

PEG: 3.17

Dividend: 2.90%

Estimate Trend: Up

Ransom Note Trendline: Avoid Coca Cola