Diageo PLC (DEO)

Underperformed the market over the last 12 months because there is not a lot of top line growth. Fine company, large, conservative. You won’t lose your shirt but he prefers business that benefit from a recovering economy.

(Market Call Minute) Prefers Ambev in Brazil because it is beer.

ADR or London exchange? This depends on whether you want to own US dollars or British pounds. He prefers British pounds right now because it is the cheaper currency. Also, there is more liquidity in the British pound stock. If you can do this without a lot of costs, he would go on the London exchange.

Great company and well run. Throw off lots of great cash flows. Good dividend yield. One issue facing these companies is that a lot of the bets have been on emerging markets, but with a slowdown in Brazil, China, etc. it has affected their numbers in the last little while. From a longer-term perspective, this doesn’t matter very much.

Just sold his holdings very recently because they were effectively a growth by acquisition company and have done very well. Doesn’t think there is much left to buy. It now becomes more of an organic growth story and he doesn’t expect to see as much growth as there has been in the past.

Premium alcohol maker. Great growth story. Really expanding into the emerging-market area, which he feels is carrying the company right now. Thinks there will be an uptick in alcohol usage in North America but emerging markets are picking up the slack. Great growth story. Trading at 18X estimated earnings.

Likes the beverage companies. You will see very good dividend growth going forward. Market puts premium on companies’ ability to pay. Buy what’s working – good getting better.

The price is okay right now. Has had a nice run from 13? to 20?. Had some challenges overseas in emerging markets but they are starting to break through to some degree. However, they still have the backdrop of US and Europe as their bellwether where they can continue to sell to them.

Own all the premium names. Decent growth rate at 8.5%. On the stock you are paying 2X peg ratio but at the same time you are getting that premium type of brand.

Have held for a long time. Up 30% with a dividend over the last 12 months. Their strategy is to acquire all the premium names they can. Really not a lot of competition in their space.

(Market Call Minute.) Good international growth.

(Market Call Minute.) Likes the business but it is too expensive for him.

His clients have done very well on this. On a valuation point of view, it is a very expensive stock at 19X earnings. Has a progressive dividend. Good balance sheet. Have acquired many companies globally and you have to wonder what is left to buy. At some point it will become an organic story as opposed to an acquisition story.

(Market Call Minute.) Has been a fabulous stock. Leading the consolidation in the worldwide spirits business. Profitability continues to increase. The big plus for them is the emerging markets being very big on Scotch.

Hitting an all-time high. Still Buying for newer clients. Lower beta stock and a decent dividend. Owns 8 of the top 15 strongest global brands. Earnings profile should continue to grow over time.