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The Best Consumer Noncyclical Stock To Buy Now, +35.8% Upside
This is a review of a low price consumer noncyclical super sector stock in the Consumers Goods Sector and Beverage Industry.
Transcript Below:
Hi how are you, Its
0:03
Mathis Conner here with Conner Management Group
0:07
0:08
and this week we are here to look at another stock for you to consider buying
0:13
this week we are looking at the best consumer non cyclical
0:16
stock buy right now. And today is Thursday January 10
0:21
2014 and the stock
0:25
the industry it in is beverages
0:28
dash Brewers. The 12 month
0:32
upside potential we see at 35. percent
0:36
so that is some nice appreciation potential potential
0:39
and we will get into discussing the name of this company
0:42
The name of the company is not unfamiliar
0:46
to most people. Its Molson Coors
0:49
Brewing. The famous Coors
0:53
commercials are pretty hard to miss during weekend sports that's
0:57
for sure
0:57
The ticker symbol is TAP, the industry they are in is beverages dash brewers
1:04
and once again we see the 12 month upside at a
1:08
very healthy 35 point 8 percent
1:11
Some quick facts
1:15
the business summary of Molson is Molson Coors Brewing Company
1:20
manufactures and sells beer in other beverage products
1:23
the company sells products in Canada under the Coors Light,
1:27
Molson Canadian, Molson Export, Molson Canadian 67 and
1:32
a list of other brand names but you know
1:36
at the end of the day they sell beer
1:39
and sell it worldwide. The website
1:43
can be found WWW dot
1:46
Molson Coors dot-com that M O L
1:49
S O N C O O R S
1:53
dot com. The company is headquartered in Denver Colorado.
1:57
They were founded 1873. The number
2:00
of employees they have stand at 18,700. Once again their ticker symbol is TAP -
2:07
"tap". The sector there are in is consumer goods.
2:12
2:16
The annual revenue for Molson
2:19
over the last 12 months stood at 4.2 billion dollars,
2:23
their net income on at 494
2:28
million dollars and their cash from operations
2:31
over the last 12 months was 1.2 billion dollars.
2:35
So this companyh generates quite a bit of cashflow.
2:39
The capitalization of Molson stands at 10.2 billion dollars.
2:45
On the next slide
2:49
are pictures from the website.
2:53
We've got the logo Molson Coors
2:57
and you know a picture of
3:00
a frosty Coor Light beer
3:04
at a football stadium with that backdrop
3:07
of snowy mountains which is pretty a
3:10
common theme for their commercials here in North America.
3:15
On the left there is a list of about 6
3:18
other beers they have
3:22
in other countries. There is the famous Amstel Light
3:26
but they have number of other beers that
3:29
I'm not familiar with Aguila, Strika ...
3:34
3:38
So these are all just other varieties of beer or varitties
3:42
of the American brand name. On to the next slide. Taking a look
3:47
at some of the financial metrics of Molson Coors:
3:51
the annual revenue stands at 4.2 billion dollars over the last 12 last months,
3:55
the net income, 494 million, and once again the cash from operations
4:00
over the last 12 months has been 1.2 billion dollars.
4:04
The operating margins in
4:07
2012, Molson Coors was 18 point 1 percent
4:11
and it 2013
4:14
the past year, the operating margins have been tracking at 21 percent.
4:18
So we are definitely seeing some some improvement which is
4:22
definitely a good thinkg, The trailing p/e right now stands at 20-point 5, and the
4:27
forward p/e ration stands at 13 point 4.
4:31
So that implies some healthy
4:34
expansion of earnings as expected by
4:38
most analysts - which is the suggestion with type of range between trailing and forward
4:41
PE ratios. The PEG ratio stands at 3.6,
4:46
its not that cheap,
4:49
but lets go on, the price to sales ratio stands at 2.4
4:54
and the price to book is at 1.2, that's pretty low
4:58
The enterprise-value to ebitda ratio is at 16-point 7.
5:02
So this is an interesting group of
5:05
valuation metrics. On one hand you you've got the
5:10
the PE ratios implying that quite of bit of earnings expansion is expected,
5:15
the PEG ratio may be slightly high, getting
5:19
slightly rich, then the price to book ratio is pretty low
5:23
at 1.2, and the enterprise value to
5:27
to ebitda value seems a bit rich
5:31
at 16.7 and
5:34
we might see see some conflict here
5:37
regarding what's cheap or not, but
5:40
this probably just a representation of the fact that this company generates
5:45
so much cash from operations. I mean cash from operations of
5:50
around 25 percent you know 1.2
5:53
billion dollars against annual revenue of 4.2 billion ..
5:57
you just don't see that proportion
6:01
all that often. I'm sure that kind of explains these
6:05
valuation metrics in an indirect way.
6:08
On to recent pricing.
6:12
Yesterday's close of Molson Coors was fifty-five dollars
6:15
26 cents. The 52-week low ...
6:19
6:24
I don't have that right. The 52 week low number
6:29
and high number are off.
6:32
I'll come back to those on the next slide. slide
6:36
But the 20-day moving average I have at 54 dollars and
6:40
85 cents. The 50-day moving average of
6:43
$54.28 and a 200-day moving average of
6:48
$51.51
6:50
6:53
So this is a reasonably tight
6:56
differences among moving averages. The average volume
7:00
of Molson Coors stands at 871
7:05
thousand shares per day. The Beta is at 1.0.
7:09
A Beta of 1 says that the stock tends to
7:13
move with the broad general stock market.
7:17
The dividend yield is
7:20
2.3 percent - so
7:23
a healthy and decent dividend yield. The average dividend payout ratio stands at 34 percent.
7:28
That's the average over the last 5 years.
7:33
And on to the
7:36
stock chart for Molson.
7:40
As expected the 52 week low
7:44
of Molson is somewhere
7:47
around forty-seven dollars. And the 52-week high is somewhere around $56.
7:53
So the stock has steadily
7:57
increased - not necessarily in a smooth trend since the
8:01
end of February of last year. At the end of February of last year the stock's
8:07
was around forty-eight dollars and
8:11
it osciallated and has gotten as high as $56 in the last three
8:17
months.
8:18
And now its around 55 dollars.
8:21
So the the company
8:24
has gone through modest
8:27
not necessarily incline in price but
8:31
definitely an increase in price
8:37
Just to summarize the financial statement quality
8:42
of Molson Coors is actually
8:45
very good. They have
8:49
some debt. But the debt they have due in five years its
8:54
pretty match manageable
8:58
at three billion dollars.
9:01
Their revenues are at $4 billion-a-year so thats
9:04
thats not much of a problem. Their sales have steadily
9:08
increased over the the last
9:11
five years. Their earnings
9:14
are expected to increase over the next year.
9:18
Their financials are a
9:21
reflection of them doing a lot different things
9:25
that are moving
9:28
the company forward. I think thats part of what we
9:31
believe is the reason for the upside.
9:35
I mean they made an acquisition in 2012,
9:38
its going to help boost
9:42
the stock price in the next year.
9:45
They experienced a bunch of one-time charges
9:48
in 2012 that they won't have to deal with
9:51
at all in 2014. They have been going through
9:56
a number cost-cutting up efforts.
9:59
They've announced plans to retire
10:03
some debt. Also
10:06
they see their market share increasing
10:10
in Eastern Europe. So they've been doing a lot
10:13
of things that at the end of the day we think is going to create
10:18
some nice upside for the stock
10:21
over the next year. So the balance sheet, the financials
10:25
look good. And as we mentioned earlier the operating margin trend
10:29
is improving and might improve even some more
10:34
beyond 2014.
10:38
So the price pattern trend as we've noted is increasing.
10:42
Overall, our market outlook,
10:45
we are still bearish.
10:49
We are definitely not bullish right now. The recent closing price
10:53
for Molson Coors is $55.26.
10:56
And our model predicts
11:00
a 12-month price target $75.04.
11:05
So the 12 month appreciation potential,
11:08
that's 35.8%.
11:12
We think that this company has some nice
11:16
upside. They are doing several things right
11:19
and they are doing it well. On to our
11:23
closing slide. If you haven't already
11:26
sign up for our weekly newsletter. You can get it by going to gmcstockpicks.com.
11:31
11:31
In that newsletter you can find out about
11:35
great stock picks like this one, as well as just other
11:40
information about the stock market and what's going on and
11:43
also just good educational information.
11:47
Just to remind you if you're new to this is that this
11:50
stock tip was driven by
11:53
our proprietary algorithms where we review over 3500 stocks
11:58
every week. This is a
12:02
result of our
12:06
program. So we're new
12:09
and want to show people how good we are. So please
12:13
go subscribe. You can unsubscribe
12:16
with just once mouse click and you're done.
12:20
But we think you'll like it.
12:23
Check our website and talk to you soon. Take care.
View all episodes
By CMG |Advice Like Investing Podcasts, Stock Market, InvestTalk, Mad Money, PThis is a review of a low price consumer noncyclical super sector stock in the Consumers Goods Sector and Beverage Industry.
Transcript Below:
Hi how are you, Its
0:03
Mathis Conner here with Conner Management Group
0:07
0:08
and this week we are here to look at another stock for you to consider buying
0:13
this week we are looking at the best consumer non cyclical
0:16
stock buy right now. And today is Thursday January 10
0:21
2014 and the stock
0:25
the industry it in is beverages
0:28
dash Brewers. The 12 month
0:32
upside potential we see at 35. percent
0:36
so that is some nice appreciation potential potential
0:39
and we will get into discussing the name of this company
0:42
The name of the company is not unfamiliar
0:46
to most people. Its Molson Coors
0:49
Brewing. The famous Coors
0:53
commercials are pretty hard to miss during weekend sports that's
0:57
for sure
0:57
The ticker symbol is TAP, the industry they are in is beverages dash brewers
1:04
and once again we see the 12 month upside at a
1:08
very healthy 35 point 8 percent
1:11
Some quick facts
1:15
the business summary of Molson is Molson Coors Brewing Company
1:20
manufactures and sells beer in other beverage products
1:23
the company sells products in Canada under the Coors Light,
1:27
Molson Canadian, Molson Export, Molson Canadian 67 and
1:32
a list of other brand names but you know
1:36
at the end of the day they sell beer
1:39
and sell it worldwide. The website
1:43
can be found WWW dot
1:46
Molson Coors dot-com that M O L
1:49
S O N C O O R S
1:53
dot com. The company is headquartered in Denver Colorado.
1:57
They were founded 1873. The number
2:00
of employees they have stand at 18,700. Once again their ticker symbol is TAP -
2:07
"tap". The sector there are in is consumer goods.
2:12
2:16
The annual revenue for Molson
2:19
over the last 12 months stood at 4.2 billion dollars,
2:23
their net income on at 494
2:28
million dollars and their cash from operations
2:31
over the last 12 months was 1.2 billion dollars.
2:35
So this companyh generates quite a bit of cashflow.
2:39
The capitalization of Molson stands at 10.2 billion dollars.
2:45
On the next slide
2:49
are pictures from the website.
2:53
We've got the logo Molson Coors
2:57
and you know a picture of
3:00
a frosty Coor Light beer
3:04
at a football stadium with that backdrop
3:07
of snowy mountains which is pretty a
3:10
common theme for their commercials here in North America.
3:15
On the left there is a list of about 6
3:18
other beers they have
3:22
in other countries. There is the famous Amstel Light
3:26
but they have number of other beers that
3:29
I'm not familiar with Aguila, Strika ...
3:34
3:38
So these are all just other varieties of beer or varitties
3:42
of the American brand name. On to the next slide. Taking a look
3:47
at some of the financial metrics of Molson Coors:
3:51
the annual revenue stands at 4.2 billion dollars over the last 12 last months,
3:55
the net income, 494 million, and once again the cash from operations
4:00
over the last 12 months has been 1.2 billion dollars.
4:04
The operating margins in
4:07
2012, Molson Coors was 18 point 1 percent
4:11
and it 2013
4:14
the past year, the operating margins have been tracking at 21 percent.
4:18
So we are definitely seeing some some improvement which is
4:22
definitely a good thinkg, The trailing p/e right now stands at 20-point 5, and the
4:27
forward p/e ration stands at 13 point 4.
4:31
So that implies some healthy
4:34
expansion of earnings as expected by
4:38
most analysts - which is the suggestion with type of range between trailing and forward
4:41
PE ratios. The PEG ratio stands at 3.6,
4:46
its not that cheap,
4:49
but lets go on, the price to sales ratio stands at 2.4
4:54
and the price to book is at 1.2, that's pretty low
4:58
The enterprise-value to ebitda ratio is at 16-point 7.
5:02
So this is an interesting group of
5:05
valuation metrics. On one hand you you've got the
5:10
the PE ratios implying that quite of bit of earnings expansion is expected,
5:15
the PEG ratio may be slightly high, getting
5:19
slightly rich, then the price to book ratio is pretty low
5:23
at 1.2, and the enterprise value to
5:27
to ebitda value seems a bit rich
5:31
at 16.7 and
5:34
we might see see some conflict here
5:37
regarding what's cheap or not, but
5:40
this probably just a representation of the fact that this company generates
5:45
so much cash from operations. I mean cash from operations of
5:50
around 25 percent you know 1.2
5:53
billion dollars against annual revenue of 4.2 billion ..
5:57
you just don't see that proportion
6:01
all that often. I'm sure that kind of explains these
6:05
valuation metrics in an indirect way.
6:08
On to recent pricing.
6:12
Yesterday's close of Molson Coors was fifty-five dollars
6:15
26 cents. The 52-week low ...
6:19
6:24
I don't have that right. The 52 week low number
6:29
and high number are off.
6:32
I'll come back to those on the next slide. slide
6:36
But the 20-day moving average I have at 54 dollars and
6:40
85 cents. The 50-day moving average of
6:43
$54.28 and a 200-day moving average of
6:48
$51.51
6:50
6:53
So this is a reasonably tight
6:56
differences among moving averages. The average volume
7:00
of Molson Coors stands at 871
7:05
thousand shares per day. The Beta is at 1.0.
7:09
A Beta of 1 says that the stock tends to
7:13
move with the broad general stock market.
7:17
The dividend yield is
7:20
2.3 percent - so
7:23
a healthy and decent dividend yield. The average dividend payout ratio stands at 34 percent.
7:28
That's the average over the last 5 years.
7:33
And on to the
7:36
stock chart for Molson.
7:40
As expected the 52 week low
7:44
of Molson is somewhere
7:47
around forty-seven dollars. And the 52-week high is somewhere around $56.
7:53
So the stock has steadily
7:57
increased - not necessarily in a smooth trend since the
8:01
end of February of last year. At the end of February of last year the stock's
8:07
was around forty-eight dollars and
8:11
it osciallated and has gotten as high as $56 in the last three
8:17
months.
8:18
And now its around 55 dollars.
8:21
So the the company
8:24
has gone through modest
8:27
not necessarily incline in price but
8:31
definitely an increase in price
8:37
Just to summarize the financial statement quality
8:42
of Molson Coors is actually
8:45
very good. They have
8:49
some debt. But the debt they have due in five years its
8:54
pretty match manageable
8:58
at three billion dollars.
9:01
Their revenues are at $4 billion-a-year so thats
9:04
thats not much of a problem. Their sales have steadily
9:08
increased over the the last
9:11
five years. Their earnings
9:14
are expected to increase over the next year.
9:18
Their financials are a
9:21
reflection of them doing a lot different things
9:25
that are moving
9:28
the company forward. I think thats part of what we
9:31
believe is the reason for the upside.
9:35
I mean they made an acquisition in 2012,
9:38
its going to help boost
9:42
the stock price in the next year.
9:45
They experienced a bunch of one-time charges
9:48
in 2012 that they won't have to deal with
9:51
at all in 2014. They have been going through
9:56
a number cost-cutting up efforts.
9:59
They've announced plans to retire
10:03
some debt. Also
10:06
they see their market share increasing
10:10
in Eastern Europe. So they've been doing a lot
10:13
of things that at the end of the day we think is going to create
10:18
some nice upside for the stock
10:21
over the next year. So the balance sheet, the financials
10:25
look good. And as we mentioned earlier the operating margin trend
10:29
is improving and might improve even some more
10:34
beyond 2014.
10:38
So the price pattern trend as we've noted is increasing.
10:42
Overall, our market outlook,
10:45
we are still bearish.
10:49
We are definitely not bullish right now. The recent closing price
10:53
for Molson Coors is $55.26.
10:56
And our model predicts
11:00
a 12-month price target $75.04.
11:05
So the 12 month appreciation potential,
11:08
that's 35.8%.
11:12
We think that this company has some nice
11:16
upside. They are doing several things right
11:19
and they are doing it well. On to our
11:23
closing slide. If you haven't already
11:26
sign up for our weekly newsletter. You can get it by going to gmcstockpicks.com.
11:31
11:31
In that newsletter you can find out about
11:35
great stock picks like this one, as well as just other
11:40
information about the stock market and what's going on and
11:43
also just good educational information.
11:47
Just to remind you if you're new to this is that this
11:50
stock tip was driven by
11:53
our proprietary algorithms where we review over 3500 stocks
11:58
every week. This is a
12:02
result of our
12:06
program. So we're new
12:09
and want to show people how good we are. So please
12:13
go subscribe. You can unsubscribe
12:16
with just once mouse click and you're done.
12:20
But we think you'll like it.
12:23
Check our website and talk to you soon. Take care.