Shares in Australia's premier beverage distributor and bottler, Coca-Cola Amatil Ltd (ASX: CCL), are currently trading at a discount to their long-term average.
With shareholders watching as the company issued a number of profit downgrades over the past 18 months, the stock price of CCA has fallen hard. Since their peak of $15.24 in May 2013, shares opened today at just $9.30, over 39% lower.
Despite a drop in share price the long-term fundamentals of the bottler remain firmly intact. With the exclusive right to distribute The Coca-Cola Company's range of products to six Asia-Pacific nations, including Australia, New Zealand and Indonesia, the company's primary business continues to pave the way for a brighter future.
Although the price war between supermarket giants Coles and Woolworths is taking its toll on earnings and intense competition with rival bottler, Schweppes, persists, in my opinion, neither are likely to hinder the company's long-term growth prospects.
Despite significant increases in wage rates throughout Indonesia, a reduction in fuel subsidies and a depreciation in the rupiah, its push into both Indonesia and PNG markets is exciting and increases the prospect of higher earnings, over time.
Unfortunately, the woes within its SPC Ardmona business are ongoing, but management will be hoping the Australian dollar can drop and provide relief in the pricing power it has against cheaper, foreign imported tinned fruit products.
Is it $5,000 bet worth taking?
If I had $5,000 to spend on one Australian blue-chip stock right now, it'd be Coca-Cola Amatil. With the price of stocks within the S&P/ASX200 Index (INDEXASX: XJO) (ASX: XJO) increasing dramatically over the past three years, CCA is one of the few quality long-term dividend-paying companies trading at a discount to its historical average.
