Opinions
Greg Dean, CFA
Corby Spirit and Wine (A)
CSW.A-T
WATCH
Feb 13, 2025
$13.750
Stock price when the opinion was issued
breweries
beverages
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PAST TOP PICK
(A Top Pick Nov 27/18, Down 6%) They had a special dividend at the end of 2018. He likes this a lot. Cannabis will likely cannabilize a lot of beer sales. In the U.S. beer sales are hit when a state legalizes weed, but not wine and spirits. They keep generating cash and special dividends.
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DON'T BUY
A solid company with a good balance sheet and nice yield. There is a modest opportunity for upside. Since 2012 they have traded between 2.5 and 3.5 times book, with a downward basis trend. The share price is unchanged in ten years and has added no value to investors in that time. He calls these stocks, "grazers" -- too comfortable to become "wolves". Nice company -- it is not going anywhere.
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COMMENT
A cash machine. Owned by Pernod-Ricard and pays a decent dividend. Occasionally, it pays a special dividend. Hard to know what the future is. A safe, defensive stock. Will Pernod buy it out and go private. It's fairly valued now if you own, you could sell, but overall the stock is okay.
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WATCH
Affinity for a product is different from investing in a stock. Don't touch until gets above $13.50. Stock seems to be pausing and could continue dropping, which would be confirmed by a drop below $12, and then you should get out. Thinly traded is a problem, as you don't want to buy a stock you can't get out of easily.
breweries
beverages
Ace Beverage acquisition got him interested. Some really nice growth coming, but not all segments are growing. So it's not going to give him the consistent 10-15% growth rate of a great company. Last quarter showed 9%.