Author(s)

Haoyue Deng, and Zichu Li

Corresponding Author

Haoyue Deng

ABSTRACT

To meet the increasing number of amateur investors and their needs for investment strategy, value investment strategies should be delivered in a more easy-understandable way given that amateur investors are not as experienced and lack of professional knowledge and educational background as well as training. This paper aims to display a value investment strategy in a more comprehensive way such that non-professional investors can easily grasp and understand. In this study, F-Score values of three groups of ratios are compared and further analyzed to select the best stock. The process of value investing analysis in order to pick a superior long-term investment stock from PepsiCo, Monster Beverage Inc and Coca-Cola is examined in this paper. We ranked these three companies based on pricing ratios, capital structure and margin ratios. The result shows that Pepsi is better than others in terms of pricing ratios; while Coca-Cola appears to be the best investment option in terms of capital structure and profitability. After further examination and comparison, we reach the conclusion that Coca-Cola is the best choice to invest among the three sample companies.

KEYWORDS

Value Investment, Soft drink stocks, Pricing ratios, Capital structure, Margin ratios