Kevin Simpson's Trades: Buying Coca-Cola & Cisco, Selling Targa Resources

Coca-Cola Investment Rationale

• Coca-Cola was purchased for its "old school" value, offering a 13 multiple, a 3% dividend, and a 53-year history of dividend increases.
• 📈 The company is noted for its consistent dividend growth, with annual increases of approximately 5%.
• 🥤 Coca-Cola's brand strength is highlighted, with its portfolio including Coke, Coke Zero, and Diet Coke, and its expansion into healthy drinks and sports drinks to appeal to younger demographics.

Cisco Acquisition Strategy

• Cisco was bought before its earnings report on Wednesday, at a price of $61, with the expectation of strong results.
• 💡 The acquisition of Splunk is noted as being absorbed into Cisco's operations for the first time, contributing to its performance.
• 💰 Cisco demonstrates unbelievable free cash flow and dividend growth, currently positioned within a growth strategy rather than solely a dividend strategy.

Targa Resources Sale and Risk Management

• Targa Resources (TRGP), a liquid gas company, was part of a short-term trade within the growth strategy.
• 📉 The position was managed by writing calls and selling portions at various price points, with a stop-out at $161.
• ⚠️ The sale is framed within a broader context of risk protection and risk management, similar to decisions made with other assets like United Healthcare in a compressed market environment.