Dealmaker’s Diary: Beyond the Famous Brand Lives an Even Better Investment

Alpesh Patel|April 17, 2025

Trump’s trade war continues to hammer markets.

Supply chains are in complete upheaval as businesses adjust to the new reality.

But not Coca-Cola FEMSA.

This $15 billion Latin American bottling giant faces minimal tariff exposure.

Its bottles fuel the addiction-level soda brands we all know and love.

My discounted cash flow analysis isn’t subtle. This stock has the potential to double even as markets tremble.

This cash-generating machine implements AI across operations. It boasts a stellar 9/10 value-growth rating. Its P/E ratio sits at just 14.8x.

Sometimes, defensive plays deliver the most aggressive returns.

Click the video below to check out this week’s Dealmaker Diary.

Transcript

Hi, friends.

Welcome to the stock of the week in Dealmaker Diary.

We have a familiar name for you.

You might think that something which a lot of people are addicted to isn’t really impacted much by tariffs. And it’s almost defensive.

But more importantly, the numbers look good.

Let’s look at some of those numbers, shall we?

You might not know what this company is.

Obviously, Coca-Cola (NYSE: KO) you’ve heard of.

This [Coca-Cola FEMSA (NYSE: KOF)] is actually the largest franchise bottler of Coca-Cola products in the world by volume.

They operate across Latin America as well.

So, again, you might not be familiar with them even if you’re familiar with Coca-Cola.

While the Coca-Cola company mostly owns it, the rest is publicly traded.

It has a $14.95 billion market cap. We’re not talking about a small company.

And, really, it’s almost a play on Latin America because the rest of the world will do well no matter what.

That said, it has geographic and product diversification – 134 brands across 10 countries.

Before we look at the numbers, I want to do what I have been doing more recently, which is look at the AI side of things.

And you might ask why AI in Coca-Cola?

Actually, I think it’s a good opportunity for us to learn how the world’s moving on. But it’s also a good opportunity for us to see whether these companies are keeping up with the cutting edge.

Now the narrative of AI is not the reason for me selecting this company.

The data is the data and the numbers are.

But I want to show you this, and you can read it yourself, the areas across which they’re using AI.

I think it’s really educational on how across supply chains, quality control, demand forecast, and marketing customer insights, supply chain management, as well and sustainability, if you’re bothered about those things, how it’s working across all of those.

The value-growth-income rating is a 9.

The forecasted price-to-earnings multiple is 14.8x.

You’re paying $14 for every future dollar of expected profits.

The Sortino ratio is 0.6, not too bad. This is a measure of reward versus risk. I’d like it to be even higher, but that’s a pretty good number.

Volatility is relatively low in these volatile times.

We haven’t got the cash return on capital invested numbers. You don’t always have one.

I think it’s because while it’s listed in the US, it is a Latin American foreign company listed in the US.

That’s not a worry for me.

And one of the things that attracted me is the general upward trend.

We’ve got a company here that has pretty much tripled in value since 2020 and was resilient through COVID.

So it can certainly take the problems we’ve had recently.

And, also, it’s come off quite a lot recently – by recently, I mean, last year when the rest of the market did well and anything which wasn’t the Mag Seven got punished.

I think we’ve got the opportunity to continue this upward trend that it’s had previously, and I’m projecting those kinds of gains. I’m expecting momentum to continue as well.

On the discounted cash flow, you’re looking at doubling your money.

So all in all, I like it.

I like it given what’s going on in the market.

So I have to tell you, it hasn’t been easy finding a good company in these markets because good companies, whilst they exist, a lot of money’s coming off the table in a lot of them, and that’s the major problem.

Thank you.