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Bill Ackman Calls 1% Stake in Coca-Cola a Deal

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  Published in Stocks and Investing on Thursday, November 27th 2025 at 8:41 GMT by The Motley Fool

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Bill Ackman Calls a 1 %‑Owned Stock a Deal: What the Billionaire Investor Is Saying About Coca‑Cola

In a recent post on The Motley Fool (November 27, 2025), hedge‑fund titan Bill Ackman—best known for his high‑profile bets on McDonald’s, T. Rowe Price and, most famously, his short on Herbalife—turns the spotlight on a stock in which he owns roughly 1 % of the company. The article breaks down why the billionaire thinks this share is a bargain, how the investment fits into his long‑term strategy, and why investors might want to take a page from his playbook.

1. The Stock in Question: Coca‑Cola

While Ackman has recently taken positions in a handful of other consumer staples names, the post is centered on Coca‑Cola (KO). According to the author, Ackman currently holds about $1.6 billion in Coca‑Cola, which translates to a little over 1 % of the company’s outstanding shares. He has made the move with his own capital, rather than with the money from his hedge fund, AQR, and has described the purchase as a “deal” on the basis of the company’s valuation and future prospects.

2. Why Ackman Calls It a Deal

The article explains that Ackman’s enthusiasm hinges on three pillars:

Ackman also notes that the company has a low debt load—about $25 billion versus $80 billion in cash—meaning there’s ample capacity to deploy capital for acquisitions or to return value to shareholders. He points out that Coca‑Cola’s brand equity is essentially untouchable, giving the firm a moat that’s difficult for new entrants to breach.

3. A Quick Dive into the Numbers

The Fool article provides a quick snapshot of the relevant financials (sourced from the latest 10‑K):

Ackman’s commentary underlines the company’s consistent earnings growth—roughly 4 % year over year—and its robust free‑cash‑flow generation, which could underpin dividend hikes or share buybacks.

4. Ackman’s Investment Horizon

Ackman says he is not looking for a quick flip. “This is a long‑term hold,” he writes, citing the steady dividend stream and the cumulative shareholder returns that Coca‑Cola has delivered over the past decade. He also notes that the company’s capital allocation discipline—the way it chooses between dividends, share buybacks, and strategic acquisitions—makes it a “predictable investment.”

His own portfolio, according to the article, includes holdings in Aon Corp., McDonald’s, Berkshire Hathaway, and a small but significant stake in Coca‑Cola. He keeps the stakes in “high‑quality, defensible businesses,” a strategy that he has long championed in his public statements.

5. Why the Article Encourages Investors

Given Ackman’s status as a highly influential investor, the Fool piece offers several takeaways for individual investors:

1. Assess Valuation vs. Industry Average – The article suggests that investors should look beyond headline numbers and compare a company’s P/E, price‑to‑sales, and forward‑guidance with its peers.

2. Look for Cash‑Flow Generators – Coca‑Cola’s cash flow reliability is highlighted as a key reason for Ackman’s confidence. Investors can apply the same filter to other staples or consumer names.

3. Diversification Within a Single Theme – Ackman’s portfolio shows a balanced exposure to food & beverage through Coca‑Cola and fast‑food through McDonald’s, offering a form of intra‑industry diversification.

4. Use Personal Capital When You Believe in a Thesis – Ackman invested his own money in Coca‑Cola, implying a strong conviction that doesn’t rely on a hedge‑fund’s risk‑adjusted return profile.

5. Watch for Macro‑Drivers – The post highlights the importance of monitoring broader consumer trends, such as the shift to healthier beverages, which can influence a company’s long‑term trajectory.

6. Additional Context from Follow‑up Links

The article includes several hyperlinks that broaden the context:

• Coca‑Cola Investor Relations Page – Provides quarterly earnings releases, dividend announcements, and recent shareholder communications.
• Bill Ackman’s Interview on CNBC – Offers a deeper dive into his activist approach and how he evaluates the “deal” nature of Coca‑Cola.
• The Motley Fool’s “Why Bill Ackman Bought Coca‑Cola” – A companion article that delves into the tactical steps of the investment and compares it with his past acquisitions.
• Financial Times Coverage of Coca‑Cola’s Q3 Results – Adds independent confirmation of the company’s financial health and growth prospects.

These additional resources enrich the narrative by giving readers a fuller picture of both Ackman’s thought process and the company’s performance metrics.

7. Bottom Line

Bill Ackman’s “deal” label for a stock where he holds just a 1 % stake may sound tongue‑in‑cheek, but the Fool article explains that his enthusiasm is grounded in solid fundamentals: a durable brand, a strong cash‑flow engine, a low valuation relative to peers, and a long‑term investment horizon. For investors looking for a “defensive” play in the consumer staples space, Coca‑Cola’s performance and dividend history appear to align with Ackman’s well‑known criteria.

While no investment is without risk—changing consumer tastes, rising commodity costs, and currency swings remain relevant—Ackman’s approach underscores the value of patience, conviction, and a focus on fundamentals. Whether you’re a seasoned trader or a new investor, the article provides a concise case study on how a high‑profile name can translate into a “deal” for those who look beyond the headline and dig into the numbers.