Coca-Cola's (NYSE: KO) $4.1B purchase of Glaceau, a producer of vitamin-enhanced water, may be just the right 'tonic' to propel it shares to a new 52-week high.

In recent years, the iconic U.S. company has had to confront a triple threat, of sorts: the need to lower costs, fend off relentless competition from rival PepsiCo (NYSE: PEP), and address a secular trend away from carbonated beverages and toward non-carbonated and more nutrition-oriented drinks.

Coke had fallen behind its major competitor -- as well as several niche drink companies -- regarding the incorporation of newer-category drinks that appeal to a more-health conscious clientele. That fact, combined with an above-average cost structure, weighed on KO's performance, and Wall Street did not respond favorably: the stock dropped below $40 in the second half of 2004.

But now Coke's acquisition of Glaceau and its flagship Vitamin Water provides another solid data point for Wall Street that Coke is making the transition to the non-carbonated drink era.

Investment Category: Coca Cola is a moderate-risk stock not suitable for low-risk investors. Coke has the distribution network and products to produce impressive results, but costs must be contained moving forward for the stock to shine.