The Chart du Jour

Buy Schweppes Against Short Coke

March 1, 2001

By, Barclay T. Leib

As many of our readers know, we primarily make our living here at Sand Spring Advisors managing a "fund of funds" that allocates to hedge fund and commodity managers. Many of these managers run long-short portfolios, seeking out under-valued securities in a given industry versus selling over-valued ones. Their goal is to create positive returns without absolute exposure to an equity market decline.

It was only this evening however that we realized that in our own recommendations here at Sandspring.com, we have implicitly recommended a paired long-short trade ourselves, never quite linking them together. We have previously recommended selling Coca-Cola and since that time the stock has plunged over 15%. We have also previously recommended buying Cadburry-Schweppes, and that stock has held firm even as the broader market has been under stress. Coke trades at 59 times earnings, and has a horrible looking technical chart pattern. Cadburry-Schweppes trades at a more modest 19.5 times earnings, and has a constructive looking chart pattern that could easily lead to new highs. Cadburry-Schweppes also now controls a wide variety of brand beverage names including 7-Up, Dr. Pepper, and now Snapple, and is achieving cost-savings in its distribution network. Earnings have been steadily growing and free cash flow ballooning.

Maybe we will get our interpretation of one of these stocks wrong, but as a paired trade, and as the market as a whole slowly gropes for a trading bottom, we think short KO and long CSG holds continued great appeal.


Subscribers are invited to click here for immediate access to our latest in-depth article: "Measuring Financial Time: The Magic of Pi." The article is 10 pages in length, and in it, we touch upon two centuries of financial history. We also leave readers with our cyclical vision for the next decade, as well as a shorter term perspective of the NASDAQ 100 index for the balance of the year.

Non-subscribers are invited to sign up for a quarterly subscription below.

It also may be of interest to some as well that because so much time (and thus timeliness) has now transpired, we recently released today three of our 2000 subscriber-only articles. These now appear under the public Earlier Articles section of the website. Perusing through them may give one a sense of the added premium level of analysis we provide to subscribers.

For immediate web-based access to our latest subscriber-only February 25th analysis, please support Sand Spring Advisors and purchase a quarterly subscription below. Our latest work will be accessible on the final page of the order process. A user-id and password for web access to all past and future articles will follow by e-mail.


How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.

Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).

Disclosure Statement

Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.


If you order by credit card, your credit card will be billed as "Sand Spring Advisors LLC"

Should you have any ordering problems, please contact us at
973-829-1962 or by email at the address below:

information@Sandspring.com


Take me back to the Sand Spring Home Page


Comments or Problems


Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at
information@Sandspring.com

Corporate Office:
10 Jenks Road,
Morristown, NJ 07960
Phone: 973 829 1962
Facsimile: 973 829 1962

Best Experienced with
Microsoft Internet Explorer
Click here to start.

The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC

This page and all contents are Copyright 2000 by Sand Spring Advisors, LLC, Morristown, NJ