Preview Mode Links will not work in preview mode

The Best Stocks To Buy


Welcome to The Best Stocks To Buy - Market Outlook Podcast Page.

Here you will find quality reviews of timely mainstream stock investment opportunities.  Our reviews are driven by our own self-developed proprietary algorithm that reviews, analyzes and ranks over 6,000 stocks every week.

More over, we provide you specific target prices for all of our reviews to remove the guesswork for you the listener and investor.  Prepare to be impressed!

The podcast is produced by Conner Management Group, a registered investment management firm based in the Houston Texas area with clients across the country.  You can find out more about our firm at www.connermg.com .

 

Jan 12, 2014

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.