Tag Archives: NYSE:BUD

Anheuser Busch: Zacks’ Bear of the Day Play

There’s an old saying that goes, “If you can’t beat em, join em.” When it comes to today’s Bear of the Day this company put a different spin on the old saying. “If you can’t beat em, buy em” or something along those lines.

I’m having a tough time finding a beer that isn’t owned by Anheuser Busch Inbev (BUDFree Report) . Remember the good old days when it was Bud versus Miller? Well that was before Belgian giant Inbev starting merging big beer companies together. It wasn’t enough to swallow up Anheuser Busch. Then the new company went and got SAB Miller, which was also the result of a big beer merger. Now they’re all bubbling around in the same keg.

It’s not that I’m hating on the beer company for being so large. I’m looking at the estimate revisions analysts have made recently and I don’t like what I see. Four analysts have dropped their earnings number for the current year and next year. The overall impact to the consensus estimate has been decidedly negative. This year’s number has gone down from $4.19 to $3.74 while next year’s number has dropped from $5.28 to $4.94. The good news is there is still plenty of growth in those numbers, a function of the merger activity no doubt. The bad news is all this negativity has dropped the stock down to a Zacks Rank #5 (Strong Sell). It’s also in a sector that is dead last in our Zacks Sector Rank.

Shares of BUD have come under pressure, breaking down from the bottom end of an extended consolidation. Shares bounced between $120 and $135 from April through the end of October. The bears finally won the battle, forcing shares down to new lows to start December. While the rest of the market was enjoying the spoils of the post-Election Day rally, BUD struggled mightily.

The stock has found some support here to start the year and is trading above its 20-day moving average. One negative though, the commodity channel index has come down from an overbought condition over 100 and through the zero line, giving a fresh “Sell” signal.

Investors looking for other stocks in the same industry should check out Zacks Rank #2 (Buy) stocks Carlsberg (CABGYFree Report) and Constellation Brands (STZFree Report)

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AB Inbev: Zacks’ Bear of the Day Play

In this day and age of “If you can’t beat em, join em” nothing surprises me. I mean, Kevin Durant moving over to the Golden State Warriors is nothing compared to AB Inbev (BUDSnapshot Report) making a play for SABMiller. Recently AB Inbev upped their offer to make up for a weakened British Pound post-Brexit. The offer now stands at 45 Pounds per share. I couldn’t help point out the hilariousness in one of myTrending Stocks videos.

I’m not bearish on InBev in the short term because of the deal. I’m bearish because it’s a Zacks Rank #5(Strong Sell) with a Value Style Score of F and a Growth Style Score of D. That tells me the valuations are a little out of whack and the estimate revisions haven’t been moving in the right direction.

Over the last sixty days two analysts have dropped their earnings estimates for the current year, while a single analyst has done so for next year’s numbers. The bearish sentiment has dropped the current year Zacks Consensus Estimate from $4.21 to $3.98. Looking at next year’s numbers, consensus has gone from $4.95 down to $4.42. The bearishness follows up on a drastic quarter for the company where EPS came in at 51 cents versus estimates calling for 87 cents.

The stock has been surprisingly resilient in the face of these downward earnings estimates. Since bottoming out just above $100 in October, the stock has approached $130 on several occasions. The most recent push to the highs stalled out just a few weeks ago. A bounce here in the short-term off support near $122 could send the stock towards $130 again but I’d be careful around earnings with so many negative revisions.

Eventually the fundamentals win out. Stocks tend to track with their earnings and if analysts are right about dropping their estimates, then this stock could be setting up for disaster in the intermediate term. If you’re bent on getting exposure to this industry, you should look at Zacks Rank #2(Buy) Constellation Brands (STZAnalyst Report) . Several stocks in the industry are Zacks Rank #3 (Hold) stocks, including Boston Beer Company (SAMAnalyst Report) .

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AB Inbev: Zacks’ Bear of the Day Play

Yesterday, AB InBev (BUDSnapshot Report) announced it would switching up its marketing of the popular Budweiser brand. The company wants to call the beer “America” and change the label to reflect all sorts of patriotic themes. That’s not the reason I’m making the stock today’s Bear of the Day but it sure makes for a great story. You can check out my stance on the subject by viewing this light-hearted video I made about it titled InBev Bumps Budweiser for America this Summer 

The reason I’m bearish on InBev is it’s a Zacks Rank #5(Strong Sell) with a Value Style Score of F and a Momentum Style Score of D. That tells me the valuations are a little out of whack and the estimate revisions haven’t been moving in the right direction.

Over the last ninety days two analysts have dropped their earnings estimates for the current year, while a single analyst has done so for next year’s numbers. The bearish sentiment has dropped the current year Zacks Consensus Estimate from $5.23 to $3.96. Looking at next year’s numbers, consensus has gone from $5.67 down to $4.50. The bearishness follows up on a drastic quarter for the company where EPS came in at 51 cents versus estimates calling for 87 cents.

The stock has been surprisingly resilient in the face of these downward earnings estimates. Since bottoming out just above $100 in October, the stock has approached $130 on several occasions. The most recent push to the highs stalled out just a few weeks ago. There is a bullish trend line providing support just below the current price action. And the Commodity Channel Index just crossed the zero line. So in the short term there’s actually a lot of momentum here.

However, eventually the fundamentals win out. Stocks tend to track with their earnings and if analysts are right about dropping their estimates, then this stock could be setting up for disaster in the intermediate term. If your bent on getting exposure to this industry, you should look at Zacks Rank #1 (Strong Buy) Molson Coors (TAPAnalyst Report) or Zacks Rank #2(Buy) Constellation Brands (STZAnalyst Report). 

AB Inbev: Zacks’ Bear of the Day Play

With the market screaming higher the last week or so, it’s tougher to find stocks to be bearish on. But if you look at the Zacks Industry Rank, you can find industries that analysts have been bearish on for a while, completely independent of the market’s movements. The alcoholic beverage business is in the Bottom 18% of our Zacks Industry Rank and at the bottom of that barrel is AB Inbev (BUDSnapshot Report).

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AB Inbev is a Zacks Rank #5 (Strong Sell). They are the leading global brewer and one of the world’s top five consumer products companies. Their portfolio of well over 200 beer brands continues to forge strong connections with consumers. They invest the majority of their brand-building resources on their Focus Brands – those with the greatest growth potential such as global brands Budweiser, Stella Artois and Beck’s, alongside Leffe, Hoegaarden, Bud Light, Skol, Brahma, Antarctica, Quilmes, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Hasseroder and Jupiler. In addition, the company owns a 50 percent equity interest in the operating subsidiary of Grupo Modelo, Mexico’s leading brewer and owner of the global Corona brand.

They wanted to get even bigger, making a bid for SAB Miller (SBMRYSnapshot Report) last week. I did a video on the deal you can watch above. The deal has since been rejected as Miller thinks it’s worth more than AB InBev’s offer. InBev is looking for ways to get more earnings. Analysts have been very bearish on InBev over the last sixty days. Six analysts have dropped their estimates for the current year and next year. The bearish attitude has dropped our Zacks Consensus Estimate from $5.49 to $5.14 for the current year and down from $5.80 to $5.35 for next year.

If you’re looking for a better alternative within the same industry, take a look at Zacks Rank #2 (Buy) stocks Castle Brands (ROXSnapshot Report) and Heineken (HEINYSnapshot Report).

Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”