Coca-Cola Amatil Ltd (ASX: CCL) might have had a positive day, with shares jumping 0.64%, but investors have still hammered the stock over the last year-and-a-half. With shares climbing 6 cents to $9.46 today, the stock is still sitting 38.7% below its March 2013 all-time high of $15.43.
Understandably, the market is nervous about the stock's near-term outlook. A pricing war with Schweppes, pressures from the major supermarket chains, a struggling SPC Ardmona business, as well as fears of changing consumer health trends have led to a number of profit downgrades which have seen investors scrambling for the exits.
However, I strongly believe this is the perfect buying opportunity. While the rest of the market is selling in fear or trying to limit their losses, I'm buying the shares at what is nearly the cheapest they've traded since the global financial crisis.
I accept that the company is going through a rough patch and that the shares could certainly drop further in price before they restart their ascent. Of course, I'd prefer they only rose from this price, but I'd happily buy more shares should they fall even further.
While I wait for Coca-Cola Amatil to return to the market's favour, I'll be more than happy to take advantage of the company's generous dividend yield. Based on estimates of a 45 cent per share payout this year, that's a yield of 4.8%, franked to 75%.
