Yahoo Finance Bear of the Day: Anheuser Busch (BUD)
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 (BUD). 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 (CABGY) and Constellation Brands (STZ)
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Constellation Brands Inc. (STZ): Free Stock Analysis Report
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Anheuser Busch Inbev SA (BUD): Free Stock Analysis Report
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