Coca-Cola Co KO saw its shares hit a new 52-week high Tuesday in reaction to its second-quarter results but the stock still has "a lot more room to run," says CNBC's Jim Cramer.
Cramer: Throwback To The 1980s
Coca-Cola's era of growth started in the 1980s when the U.S. economy shifted towards the post-industrial stage and culminated in a "great bull market," Cramer said Tuesday evening. Coca-Cola's earnings report signals the current environment is similar to the growth era last seen decades ago.
Coca-Cola under the leadership of CEO James Quincey proved it's "back and back big," Cramer said. The company showed 6% organic grow in a lot of its businesses, including secular growth in emerging markets and the highest volume growth in a decade.
Backed by a dividend yield of around 3% and a commitment to buyback a lot of its own stock, Cramer said it "might as well be 1985."
Technical Analyst: 'Always' Buy At The Highs
Coca-Cola's stock hitting new highs shouldn't deter investors from buying shares as the stock is playing some catchup after lagging major indices over the past five years. In fact, taking a much longer timeframe, Coca-Cola's stock traded at similar levels in early 2019 as it did in 1998, Mark Newton, president and founder of Newton Advisors, said during a CNBC "Trading Nation" segment.
Breaking above a 20-year base is a "very bullish" indication for Coca-Cola's stock and on an intermediate-term basis shares should start to outperform, Newton said.
"I think it's finally time to have a Coke and a smile," he said. "It's right to bet on this stock, and near term and intermediate term, it likely can show some good outperformance."
Coca-Cola's stock traded around $54.78 per share at time of publication.
Related Links:
Morgan Stanley: Coca-Cola 'Clearly' Boasts Better Growth
Morgan Stanley's Beverage Pair Trade: Overweight Coca-Cola, Underweight Keurig Dr Pepper
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