Why Coca-Cola Amatil Limited could be a once in a generation opportunity

Coca-Cola Amatil Limited (ASX: CCL) is a fallen angel that many investors have been quick to write off. But what if now is actually a once in a generation opportunity to buy?

Shares in CCA have always commanded a premium price because, until recently, it was a quality company which had proven its performance year-in, year-out. The brand is one we all know and the strong regular dividends have made it a buy-and-hold favourite.

So can the company turn things around and get back on the righteous path? There are three key points which suggest CCA has the potential to rise again:

New leadership

The classic maxim that ‘a new broom sweeps differently’ is absolutely right. Newly installed CEO Alison Watkins will lead a strategic review of the company which will be a catalyst for change.

Ms Watkins will bring will bring to CCA new focus and direction, etched out from her experience as Managing Director and CEO of agribusiness GrainCorp Limited (ASX: GNC) between 2010 and 2013.

Access to Asia

Investors have been worried about the slowing growth of sales in Indonesia, but the region remains a significant long-term opportunity with a population around 16 times larger than Australia.

Consumer tastes are likely to be different, but one of CCA’s major strengths is developing products for every pallet and offering “beverages for every occasion” and meeting consumer demands.

An attractive price

Coca-Cola Amatil shares have not traded as low as $9.41 since 2009, wiping off much of the premium the shares had previously commanded.

The company is forecasting a decline in NPAT of around 15% for the first half of FY14. If that extends to the full year the company’s NPAT will be around $427 million which puts the company on a forward price to earnings ratio of just over 16. This is in-line with other blue-chips like Commonwealth Bank of Australia (ASX: CBA) or Telstra Corporation Ltd (ASX: TLS) and could prove to be an attractive price if the company can leverage its strengths and turn things around going forward.

Foolish takeaway

If CCA can get back on track under the new direction of Alison Watkins and resume gradual growth both in Australia and the massive Indonesian market, at the current price CCA could represent a once in a generation opportunity to buy.

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Motley Fool contributor Regan Pearson does not own any shares in any of the companies mentioned in this article.

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