Beat a Frothy Stock Market Is None Other Than Coca Cola

Summer is heating up, and the best way to beat the rising mercury might just be with an ice-cold Coke.

No, I’m not just talking about the temperature outside. U.S. stocks have been having a heat-wave of their own, up more than 10% on a total returns basis so far in 2017, and the big S&P 500 index is hovering right at all-time highs as I write.

What’s the best way to beat that frothy market action as investors get increasingly nervous about a possible correction this summer? It’s shares of The Coca-Cola Co. (KO) .

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Coke has been a strong performer in recent months. Shares are up more than 14% on a total returns basis since bottoming back in mid-February. Simply put, this big blue-chip beverage stock is meaningfully beating the rest of the market right now — and one chart is signaling that the rally in Coke could be about to accelerate again as we head toward July.

Before we get to that, a bit of background on Coca-Cola.

Coca-Cola is the biggest beverage company on the planet, serving up more than 1.9 billion drinks per day. Coke also boasts one of the most impressive distribution infrastructures in the business, with an operational reach that spans more than 200 countries.

It’s that infrastructure that’s been driving big change in Coke recently. After consolidating its North American bottlers back in 2010, the firm is reversing course, with plans already underway to refranchise the majority of its company-owned bottling operations. While that may seem like a bizarre about-face, it actually makes considerable sense.