Molson Coors Brewing Company (TAP)

This is one of the top brewers, but like all the others in the beer industry, Molson Coors is struggling. Their market is extremely mature, with declining consumption. Molson has bought some craft brewers but those companies are getting expensive. Very low multiple and generates good cash flow. They are using free cash to pay down debt. But it's difficulty to find new ways to grow. It's a tough call to say to buy because the company looks relatively cheap, well-managed but maybe not likely to grow much. They're entering into joint ventures with cannabis companies, experimenting with infused beverages. He is not sure how big the market will be for these products. It might get very crowded very quickly. For the next few years, for Molson Coors, these are small projects--tiny in the grand scheme of things.

Brewers are struggling with declining sales. Valuation is still on the rich side, mainly because of declining margins. Doesn’t have EM exposure that you’d like to see. Be cautious. Compares poorly to its peers. (Analysts’ price target is $77.43.)

Weaker volume sales in US. Core business is US and Canada. Free cash flow is about 10% free cash flow yield. Concern that beer growth is slowing. They’ve been smart and done a joint venture with a marijuana company. This is a good level to buy.

A defensive name. A company that looks to be acquired. The stock looks goods now on the pullback. Steady dividend and good yield. Maybe the fact that marihuana is being legalized affected the price of the stock and its multiples. A boring traditional business as it is

Had a terrific 2015-2016 and a “not so good” 2017. Thinks that was part of a rotation out of defensive, boring stocks into sexy technology names. This is not going to be a fast grower. It recently acquired Millers Coors, a much bigger company. Not a growth story, but more of a cost control story. There is a lot of value in this. It is worth $100 a share, and perhaps $125 in a couple of years once it pays down the debt, as well as a potential acquisition by Heineken.

It is an interesting company. If we are thinking about being late cycle, there are a few industries that are recession proof, like alcohol. They have a nice dividend.

She is not a fan right now. There is incredible, tough competition in beverages.

(A Top Pick Nov 3/16. Down 18%.) Hasn’t worked out recently, although his long-term clients have done quite well on this. They didn’t have a very good analysts’ day. Tried to rectify miscommunications they had with analysts. Had a Q2, that was better than what some analysts expected. Thinks it has something to do with what is going on with all consumer packaging goods. He would still make this a top pick.

Has had a huge comeback in the last year or so. It is down significantly, and only yields about 2%-2.5%. These are the types of companies and sectors you like to buy ahead of a recession. If it dropped another 10%-15%, it could be something you could look at.