We recently published a list of 8 Best Low Float Stocks to Invest in Now. In this article, we are going to take a look at where Coca-Cola Consolidated, Inc. (NASDAQ:COKE) stands against other best low float stocks to invest in now.
Stocks with low public float refer to shares of a company that are available for trading by the public, but in relatively small quantities. The public float is the portion of a company’s shares that are not held by insiders, such as company executives, or major institutional shareholders who are usually long-term passive investors. When a stock has a low float, it can be more volatile because the smaller supply of shares means that even small changes in demand can significantly impact the stock price. For investors, this can present both opportunities and risks. While low float stocks may see large price movements, they can also be harder to trade, leading to higher spreads and less liquidity, which may be particularly painful when seeking to liquidate the investment. Consequently, investors need to be cautious with low float stocks and only buy them strategically with very high conviction.
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We believe that low float stocks become particularly attractive during times of heightened volatility, which usually happens amid pronounced geopolitical challenges or regime changes, when investors don’t know how to react to rapidly evolving circumstances. With the US stock market officially in correction territory and the implied volatility index more than 75% above the year-to-date lows, the current times perfectly fit our description of uncertainty. First, the markets have negatively reacted to the realization that tariffs will soon become a reality rather than a negotiation tool used by the new administration; the President further announced 50% tariffs on Canadian steel and aluminum, which caused some havoc among investors. On the positive side, some progress on the tariff-avoiding deal between the US and Canada, as well as the ongoing peace negotiations related to Ukraine in Saudi Arabia, provided some optimism and a boost for the stock market. Still, the picture remains dull for many investors who became accustomed to the high-growth 2023-2024 period, fueled by the AI megatrend.
A key piece of the puzzle to keep in mind when picking the right low float stock to invest in is the near- and mid-term outlook for the sector it operates in. It is well known that macroeconomic headwinds in the end market may mute even the most exceptional growth story, regardless of how strong the company’s moat is. We clearly see sluggish conditions in the construction sector, as new data shows a pronounced slowdown in both residential and commercial starts. With tariffs on construction materials kicking in, as well as the new administration being a headwind for immigration, we see this sector potentially remaining pressured for the near future. The consumer discretionary space could see slow growth as well in the upcoming quarters, as recent layoffs, as well as a tanking stock market, are very likely to make consumers more cautious with their spending. Finally, some niches in the industrial sector could also be pressured due to lower federal spending and the deteriorating Capex outlook reported by business surveys. The outlook on every other sector remains unchanged and could potentially nest some exceptional low float stocks to invest in right now.
Our Methodology
To compile our list of low float stocks, we used a Finviz screener to filter for companies that have less than 10 million shares floating for purchase. We then compare the sample with our proprietary list of hedge fund ownership and include the top 8 stocks with the highest number of hedge funds that own the stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A line of colourful nonalcoholic and carbonated beverages and soft drinks at a convenience store.
Coca-Cola Consolidated, Inc. (NASDAQ:COKE)
Number of Hedge Fund Holders: 28
Coca-Cola Consolidated, Inc. (NASDAQ:COKE) is the largest independent bottler of Coca-Cola products in the United States. The company manufactures, distributes, and markets a wide range of nonalcoholic beverages, including Coca-Cola, Diet Coke, Sprite, Fanta, and Dasani, along with partner and private-label brands. It operates production and distribution facilities across multiple states, serving retailers, restaurants, and other businesses. COKE generates revenue through direct sales and distribution agreements with The Coca-Cola Company, and plays a key role in the US beverage supply chain, focusing on bottling, logistics, and customer service.
Coca-Cola Consolidated, Inc. (NASDAQ:COKE) delivered robust financial results in 2024, with fiscal year net sales rising 3.7% to $6.9 billion and Q4 net sales up 7.1% to $1.7 billion. Gross profit for Q4 grew 8.8% to $697.9 million, accompanied by a 70-basis-point increase in gross margin to 40%. Income from operations experienced remarkable growth, surging 22.6% to $218.7 million in Q4 and climbing $85.9 million to $920.4 million for the full year. These achievements were underpinned by the strength of Sparkling brands (particularly Zero calorie offerings) strategic pricing initiatives, and increased demand in club and value retail channels for multi-serve, value-oriented packages. The company also demonstrated strong financial management, generating $876.4 million in operating cash flow for 2024, up from $810.7 million in 2023. Investments in growth were substantial, with $371 million allocated to supply chain enhancements and other initiatives, alongside shareholder-focused actions such as $626 million in stock repurchases and an increased annualized dividend of $10 per share.
Looking ahead to 2025, Coca-Cola Consolidated, Inc. (NASDAQ:COKE) anticipates slower financial growth but remains optimistic about delivering solid margins and robust cash generation. Management is encouraged by the ongoing success of Sparkling brands and is poised to enhance the performance of its Still portfolio through well-crafted commercial strategies. This forward-looking approach, combined with disciplined capital allocation, positions the company for continued strength in the beverage market. With a share float of only 5.18 million, COKE is one of the best low float stocks to invest in now.
Overall, COKE ranks 4th on our list of best low float stocks to invest in now. While we acknowledge the potential of COKE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.