Why the Coca-Cola Amatil Ltd share price has been CRUSHED today

Unfortunately for its shareholders, the Coca-Cola Amatil Ltd (ASX: CCL) share price is not having a great end to the week.

In morning trade the beverage company’s shares have fallen almost 10% to $9.69 following a disappointing Easter trading update.

According to the release, year-to-date trading in its Australian Beverages segment has been weaker than last year, with all of its channels experiencing volume and price pressure as a result of competition and category trends.

In light of this, management expects underlying net profit after tax to decline in the first-half of FY 2017.

While management does expect things to improve in the second-half, at this point in time they predict full-year underlying net profit after tax to be in line with last year’s result.

Should you buy the dip?

As recently as the end of last month, I felt Coca-Cola Amatil’s shares were expensive and at risk of a pull-back.

Whilst one has now come, I’m still not ready to invest. With earnings likely to be flat at best this year, 18x underlying earnings is still a little rich for my liking.

While management is working on initiatives with The Coca-Cola Company to address the structural changes in the market and rebalance its portfolio, until things improve I would focus on other consumer staples shares instead.

Shares such as a2 Milk Company Ltd (Australia) (ASX: A2M) and Tassal Group Limited (ASX: TGR) could be better options in my opinion.

Alternatively these fantastic shares could be even better investments today. If I owned Coca-Cola Amatil shares I would sell them to buy these.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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