Molson Coors Brewing Company (TAP)

Cheap stock that he likes because of this. Secular headwind is that people are not drinking as much beer as you would like. Overall it is a hold, but attractive at a valuation point. Prefers DEO-N for liquor exposure. It is a buying opportunity today.

Beer drinking has finally stabilized. Seemed that everybody was saying nobody is drinking beer any more. Global beer sales were up in the last quarter. They are also the biggest craft brewer in the world. Likes its joint venture with SABMiller called MillerCoors. Thinks at some point SAB is going to look at Millers to Buy it. If so that could be hugely accretive to its earnings. Yie;d of 2.2%.

Has had a great run over the last little while. In a very low tax rate which is not sustainable. Expects they will have less and less pricing power. Also, volumes are not going to grow as much as people think. Decreasing volume growth is going to hurt their numbers.

Likes the beer business. One of his top picks tonight is a beer. Gaining profitability and market share.

A much anticipated patio season coming up. This one is pretty fairly valued. 14 times earnings. One of the smaller multinational brewing companies. There is talk of trimming some staff. He wonders if they are prettying themselves up possibly to be acquired, but don’t buy it for this.

Well run company but does not have the breadth of some players. No emerging market exposure. The acquisitions they can do are limited. They need organic growth, which is difficult.

(A Top Pick Feb 26/13. Up 16.58%.) This is a value investor’s dream. Thinks their joint venture in MillerCoors is worth almost as much as the entire stock price. Beer consumption is not increasing but they own a ton of brands and are generating lots of free cash flow. He is still Buying.

Good company. Dealing with a bunch of challenges in the US, in terms of beer consumption relative to some of the other alcohol that it has. Has performed well. Concentration of sales of this company in beer scares him a little bit. Trends are probably going to improve as the economy improves, particularly in lower income families.

(A Top Pick June 12/12. Up 20.11%.) This company has been going nowhere in terms of earnings. Beer demand is in decline and they are facing a lot of competition but they are smart capital allocators and made a nice European acquisition and are slowly paying down the debt on this. Thinks there’ll be more money in the kitty to increase the dividend or make another acquisition. Very cheap.

Molson Coors (TAP-N) or Anheuser Busch (BUD-N) for a 5-10 year hold? He is not long anything in this sector because growth is not that strong, but between the two he would probably be more inclined to go with this one because he thinks you will continue to see more consolidation.

This company has a joint venture called Miller Coors with Sad Miller. At some point in time, he feels Sad Miller will want to take over both companies because he thinks Miller Coors is probably worth as much as the market cap of Molson Coors. Molson Coors valuation is 10X earnings while all the other beer companies are 15X earnings. Nice dividend of 2.78% and he expects a dividend increase.

Initially the market sold off the stock because of the Starbev acquisition but then look deeper and saw that it was working. Expect the next quarter you will see that it wasn't a bad acquisition.