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Miller Coors Buys Craft Brewer

|Includes: ABEV, BUD, CABGY, CCU, DEO, HEINY, Kirin Holdings Company, Limited (KNBWY), SAM, SBMRY, TAP

VALUATION WATCH: Overvalued stocks now make up 39.26% of our stocks assigned a valuation and 12.77% of those equities are calculated to be overvalued by 20% or more. Three sectors are calculated to be overvalued--with one at-or-near double digits.

--If You Cannot Beat Them, Buy Them Miller Coors Buys Craft Brewer

Molson Coors Brewing Company (NYSE:TAP) is the world's fifth-largest global brewer. Molson Coors Brewing Company has 15,000 employees worldwide, 18 breweries, and a broad portfolio of over 40 brands, including Molson Canadian, Coors Light and Carling.

SABMILLER PLC (OTCPK:SBMRY) is one of the world's largest brewers with brewing interests or distribution agreements in over sixty countries across six continents. The principal activities of the Company and its subsidiaries are the manufacture, distribution and sale of beverages. The group's brands include premium international beers such as Grolsch, Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands. Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world.

Together these two giants form MillerCoors LLC and they are the latest macro brewer to enter the craft beer market NOT by making better beer on their own, but via an acquisition. The firms announced today that they had acquired Saint Archer Brewing, San Diego, California. Saint Archer produces @35000 bbl/year.

This purchase comes on the heels of another high-profile acquisition as Heineken also announced this week that it was purchasing a 50% portion of famed craft brewer Lagunitas.

Macro brewers remain stymied by the better craft beers, and keep losing market share to the far more numerous competitors. Miller Coors hopes that they can have an easier time of penetrating the market by pushing the popular Saint Archer IPA across the US.

These sorts of arrangements pose a conundrum for craft beer aficionados as drinkers want to try quality beers from across the nation, but are reticent to do so once the craft brand is "tainted" by its association with a big macro brewer. MillerCoors promises that Saint Archer will remain independent, and just "benefit" from large-sale distribution and sales resources. But, often that doesn't pass muster with the notoriously picky craft drinkers.

Meanwhile the big boys continue to claim craft cannot continue to expand, that "real men" drink weak American lagers such as Budweiser and Coors, and that many of the upstarts will soon go under. So far, that has not been the case, and mocking craft beer drinkers via Super Bowl ads and other means has been a colossal waste of resources which would be better spent on ingredients and some better brews.

Below, we present the latest top-ten list of major beer brewing/beverage stocks from our models. They are ranked according to their one-month forecast return figures. Members can always screen for these stocks using our advanced screening page HERE or our industry valuation page HERE.

 

 

 

 

 

 

 

 

 

 

 

Ticker Company Name Market Price Valuation Last 12-M Return 1-M Forecast Return 1-Yr Forecast Return P/E Ratio Sector Name
KNBWY KIRIN HLDGS CO 13.81 N/A 4.46% 0.13% 1.51% N/A Consumer Staples
CCU CERV UNIDAS-ADR 20.99 -11.31% -5.71% 0.12% 1.49% 18.23 Consumer Staples
BUD ANHEUSER-BU ADR 108.06 -6.11% -3.07% 0.07% 0.82% 19.76 Consumer Staples
HEINY HEINEKEN NV 39.015 N/A 0.87% 0.06% 0.74% N/A Consumer Staples
SAM BOSTON BEER INC 213.34 -17.36% -1.09% 0.01% 0.15% 29.41 Consumer Staples
DEO DIAGEO PLC-ADR 105.95 N/A -11.57% -0.06% -0.72% 18.29 Consumer Staples
TAP MOLSON COORS-B 68.44 25.92% -2.49% -0.06% -0.75% 18.04 Consumer Staples
ABEV AMBEV-PR ADR 5.03 -15.86% -26.35% -0.11% -1.27% 17.34 Consumer Staples
SBMRY SABMILLER PLC 46.25 N/A -17.73% -0.17% -2.06% 19.21 Consumer Staples
CABGY CARLSBERG A/S 14.96 N/A -19.72% -0.27% -3.19% N/A Consumer Staples

Below is today's data on TAP and SBMRY:

TAP: ValuEngine continues its HOLD recommendation on MOLSON COORS-B for 2015-09-09. Based on the information we have gathered and our resulting research, we feel that MOLSON COORS-B has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Book Market Ratio.


 






ValuEngine Forecast
  Target
Price*
Expected
Return
1-Month 68.40 -0.06%
3-Month 70.13 2.47%
6-Month 72.59 6.06%
1-Year 67.93 -0.75%
2-Year 84.67 23.72%
3-Year 77.09 12.64%

 















Valuation & Rankings
Valuation 25.92% overvalued Valuation Rank(?) 10
1-M Forecast Return -0.06% 1-M Forecast Return Rank 46
12-M Return -2.49% Momentum Rank(?) 63
Sharpe Ratio 0.49 Sharpe Ratio Rank(?) 80
5-Y Avg Annual Return 8.93% 5-Y Avg Annual Rtn Rank 72
Volatility 18.10% Volatility Rank(?) 78
Expected EPS Growth 3.08% EPSGrowth Rank(?) 29
Market Cap (billions) 11.29 Size Rank 91
Trailing P/E Ratio 18.04 Trailing P/E Rank(?) 61
Forward P/E Ratio 17.50 Forward P/E Ratio Rank 38
PEG Ratio 5.87 PEG Ratio Rank 6
Price/Sales 2.94 Price/Sales Rank(?) 31
Market/Book 79.08 Market/Book Rank(?) 2
Beta 1.00 Beta Rank 45
Alpha -0.07 Alpha Rank 46

SBMRY: ValuEngine continues its HOLD recommendation on SABMILLER PLC for 2015-09-09. Based on the information we have gathered and our resulting research, we feel that SABMILLER PLC has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Book Market Ratio.


 






ValuEngine Forecast
  Target
Price*
Expected
Return
1-Month 46.17 -0.17%
3-Month 46.47 0.47%
6-Month 46.82 1.23%
1-Year 45.30 -2.06%
2-Year 47.91 3.58%
3-Year 50.66 9.54%

 















Valuation & Rankings
Valuation n/a Valuation Rank(?) n/a
1-M Forecast Return -0.17% 1-M Forecast Return Rank 37
12-M Return -17.73% Momentum Rank(?) 43
Sharpe Ratio 0.49 Sharpe Ratio Rank(?) 80
5-Y Avg Annual Return 10.06% 5-Y Avg Annual Rtn Rank 74
Volatility 20.46% Volatility Rank(?) 74
Expected EPS Growth 9.97% EPSGrowth Rank(?) 43
Market Cap (billions) 74.60 Size Rank 99
Trailing P/E Ratio 19.21 Trailing P/E Rank(?) 57
Forward P/E Ratio 17.47 Forward P/E Ratio Rank 38
PEG Ratio 1.93 PEG Ratio Rank 21
Price/Sales n/a Price/Sales Rank(?) n/a
Market/Book 45.71 Market/Book Rank(?) 3
Beta 1.25 Beta Rank 32
Alpha -0.14 Alpha Rank 38