Stockchase Opinions

Don Vialoux Molson Coors Canada (B) TPX.B-T DON'T BUY Mar 10, 2009

Technically there is still a downward trend. Fundamentally, a lot of consumer stocks like this are struggling right now.
$42.160

Stock price when the opinion was issued

breweries beverages
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HOLD
Balance sheet is better and they will be increasing their dividends June 15. His problem with the beer side is that the North American demographics don't set up very well. Under 30 is only growing by about 1%.
DON'T BUY
Brewers are faced with a lot of headwinds. Trading at 11-12 times earnings, which may be a reasonable price but doesn't see a lot of growth. Brewers grow at 2%, maybe 3% of GDP and are faced with the aging demographic population, which drinks less beer.
COMMENT

This is a staple business and one that is pretty good through a lot of different economic environments. The yield is not that attractive. He usually likes to see yields in the 3%-5% range. This is off about 40% since the middle of last year, and he wonders why. When a stock this big gets hit that hard, and has a good of the business behind it, it is probably a reason to take a look at it and he is going to do some homework on it. Dividend yield of almost 2%.

DON'T BUY
Little growth in this sector, but TPX is generating cash. He won't invest in this industry.
DON'T BUY

Rough go. Societal move towards non-alcoholic drinks. They'll come through. Tough space, especially for beer. Spirits are more compelling. But there are worse investments.