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The first thing I said to the journalists when I opened up our Portfolio Punt section to international stocks was that they couldn’t punt Apple simply because they had an iPhone or iPad on their desk. I find myself strangely conflicted kicking the section off with a punt on Coca-Cola, considering my reputation for mixing it with Spiced Gold. But I will dismiss criticism as editorial prerogative.

Following the release of quarterly results that came in slightly ahead of analysts’ expectations, Byron Lotter, of asset management firm Vestact, noted: “What was really impressive was the growth they managed in China. Volumes rose by 21% in that region last quarter and the company sees a lot more growth coming from that region. This is because the product isn’t as accessible as it should be and if they manage to increase the availability, which they are working on, they will see even more growth in consumption.”

A historical earnings multiple of 17 times earnings and a forward PE of around 15 times might sound a little rich to South African investors, but considering the gains Coca-Cola is currently making, it would definitely be classified as a growth stock.

Since the start of the year South African asset managers have been adding it to their portfolios, including the Absa International Fund and the Coronation Global Managed Fund (rand-denominated). “We currently view global equities to be the most attractive asset class by far, and the fund’s equity exposure of around 73% reflects that fact,” Coronation portfolio manager Gavin Joubert noted in a recent report-back to clients, pointing out South African investors can pick up high quality international companies on very attractive valuations.

Keep an eye on Coke and look to accumulate it should the European debt crisis and the US debt ceiling concerns continue to worry global markets.
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