Opinions
Gordon Reid
Anheuser Busch Companies Inc.
BUD-N
COMMENT
Apr 30, 2014
$105.820
Stock price when the opinion was issued
breweries
beverages
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DON'T BUY
The chart back to 2012 shows a move from $50 to $110. Now it is coming down. There has been a lot of volume at the higher range. He thinks there could be a lot of profit taking going on will the recent pullback. This is technically a bad sign that could trigger further selling down to $85. It needs to make a new high above $105 before he would become a buyer.
breweries
beverages
TOP PICK
Stockchase Research Editor: Michael O'Reilly Recently reported earnings support the ability of BUD to be able to pass along rising costs to consumers, making it a good inflation hedge. It continues to expand its product line beyond just its iconic beer and has established a strong brand affiliation with the NFL (whose league will begin again soon). Growth in next year's earnings are expected to value the company at 15x earnings compared to peers at 19x. It trades at just 1.4x book value. It has used prudently used some cash reserves to aggressively retire debt early. We recommend at stop loss at $46, looking to achieve $73 - upside potential of 33%. Yield 0.75% (Analysts’ price target is $73.00)
breweries
beverages
TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate this iconic brand as a TOP PICK. Growth in next year's earnings are expected to value the company at 15x earnings compared to peers at 19x. Management continues to exploit its low cost advantage and operational efficiencies. It trades at just 1.2x book value. We like that it has grown cash reserves while aggressively retiring debt. We continue to recommend at stop loss at $46, looking to achieve $65 - upside potential of 32%. Yield 0.81% (Analysts’ price target is $65.28)
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Anheuser Busch (BUD-N) or Dollar Tree (DLTR-Q)? Given the choice, he would probably go with Anheuser Busch. Consumer spending has been a little bit suspect and he would tend to shy away from the purer play of consumer spending. Anheuser Busch would be more of a staple as opposed to a discretionary.