Investment analysis of Coca Cola Hellenic Bottling Company

Abstract

Studying the investment attractiveness of a company is an integral part of the decision to buy or sell shares. Investment analysis includes a review of the company, competition in the industry, as well as financial analysis, likelihood of risks and company value estimation. In this article, we’ve conducted an investment analysis in regard to Coca-Cola Hellenic Bottling Company (HBC). Currently the company is undervalued compared to competitors in the market. However, it remains a good choice with its high stability in the market. Most of the economic indicators of the company are expected to grow rapidly in future periods. Environmental protection and health benefits of the product are the main demand drivers and trends now and in the near future (in addition to quality products and excellent communication with consumers through advertising and other activities). Moreover, existing trade and political conflicts between the countries are indicators of a looming recession, which can also affect the market of soft drinks. Besides, the company has strong competitors. We cannot say that Coca Cola HBC stands out strongly as a market leader. However, its development and market position is stable. We should mention that Coca Cola HBC 6 times in 7 years took the first place in The Dow Jones Sustainability Index and 9th year in a row company is in top 3 Global and European beverage companies. Coca-Cola HBC’s main investment risks include changes in regulations and consumer preferences due to raising health and environmental concerns. The company is also exposed to the risk of currency volatility, commodity costs uncertainty which can affect its financial performance. Such risk as cyberattacks, supply and distribution disruption can cause damage to company’s ability to operate effectively. There is a possibility of management failing to implement company’s business model and strategies in Coca-Cola HBC’s recent acquisitions. The article allows to delve deeper into the essence of the functioning of business processes in the soft drinks industry and to offer authors’ vision of Coca-Cola HBC assessment.