I originally recommended Heineken NV (HINKY.PK) on July 9/07 (IWB #2725) at $28.60. The stock closed Friday at $24.70. (All figures in U.S. dollars.)
This is another over-the-counter stock which has done little since we recommended it in July 2007 at $28.60. When I last reviewed it in February 2008 it was at $27.40. This week it closed at $24.70.
I don't know why I have been keeping this around since I don't even like beer but I reason that most people do. And Heineken brews a lot of beer! Anyone who does like the beverage has almost certainly had at least one glass of Heineken in their life and perhaps many more.
In addition to its flagship brand, the company brews and sells more than 200 international, regional, local, and specialty beers and ciders. Some of their well-known brands include Amstel, Foster's, Newcastle Brown Ale, and Star. The operations are comprised of six geographical segments: Western Europe, Central and Eastern Europe, The Americas, Africa and the Middle East, Asia-Pacific, and Head Office. As of the start of 2009, the company had a global network of 125 breweries in more than 70 countries although it has done some downsizing since to cut costs.
Although beer consumption is down due to the weak economy, the company reported a small profit increase in the 2009 fiscal year. The stock pays a semi-annual dividend which is 30-35% of net profit. My guess is that as people feel better about the economy they may drink more, which would translate into an increase in both profit and dividends. Let's stick with this one.
Action now: Hold.
Disclosure: Author holds a long position in HINKY.PK