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| nelaina |
 Posted: Fri Jan 27, 2006 4:36 pm Post subject: |
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CFO
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| Dave Rathbun wrote: | | The brewery that BUD has an interest in for Mexico is Grupo Modelo (50% ownership) and in China Tsingtao Brewery (27%). |
tsingtao is good beer!  |
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| Im Not Warren Buffett |
| Posted: Sat Jan 28, 2006 3:42 am Post subject: |
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CFO
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| Dave Rathbun wrote: | | poornewb wrote: | | Cramer says it all the time dont let your morals get in the way of making money. |
Okay, so now I'm going to take the opposite side. There are a number of SRI (Socially Responsible Investing) mutual funds out there, and more than a few are beating their associated benchmarks (S&P 500, and so on). So if you look, you can find funds that will invest the way you want to and still abide by your moral compass.
Let me be absolutely clear about this point: I am not making a judgement for or against this style of investing. It's an option, I just don't subscribe to it.
Here's a link I found while researching this post. (Yes, I do that.  )
Ten worst corporations of 2004
Ten worst for 2003
2002
... and the index to the list of articles.
I've just discovered the site, and there is some interesting reading. But remember that anyone can throw up a web site and say whatever you want to say.  If you see something interesting / shocking / and so on, find confirmation from 2 or 3 other sources. |
Those links are absolutely vicious... talk about hating on corporations!
I am not a fan of SRI, I just don't see how it is relevant... maybe if you have a very strong stance against one thing thats alright, but I think that the majority of companies engage in something people could take offense to. Swallow your pride and conscience, and put your money into a vice fund! Yes, such things do exist.  |
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| Im Not Warren Buffett |
| Posted: Sat Jan 28, 2006 3:44 am Post subject: |
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CFO
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| Dave Rathbun wrote: | Why do I invest in a company that makes products that I don't now and never will use? Simple, it's my way of getting back at them. Think about this... how much money does a company make when you buy their stock? Zero. Nada. Zilch. Unless you're buying into a public offering any money to be made from the sale of company stock goes to the owner of the stock, not the company. So MO is not making money from my investing, I am.
The fact that they are currently paying 4.3% dividend is a nice bonus too.
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This is always the argument I've used against SRI; the company gets nothing from your stock purchase... then I mention the stocks tend to perform well, and the outrage sets in again with whomever I'm talking to. |
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| Dave Rathbun |
| Posted: Sat Jan 28, 2006 10:51 am Post subject: |
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I thought the site was... interesting.
SRI is not something I personally subscribe to, I think I made that clear. If you do a google for the concept, however, you'll find that there are SRI funds that are beating the market indexes, so it is possible to invest according to our faith or beliefs and not sacrifice reasonable (or even better than market) returns.
I'm trying to get used to E*Trades various research tools. (I was a Harris Direct customer and E*Trade bought them out.) The S&P report (released Jan 21, 2006) has the following quote that you (IMWB) would appreciate, as they use DCF to help arrive at a target price.
| Quote: | | Our 12-month target price of $45 blends our DCF and P/E analyses, giving more likely weight to the latter. Our DCF model calculates a $53 intrinsic value using a 9.0% cost of capital and a 2.4% five-year growth rate. Applying a below historical average P/E ratio of 16X to our 2006 EPS estimate of $2.68, we get a $43 value. |
So based on two different ways to analyze the company they arrive at 12 month price targets of $53 or $43, applying a weighted average results in a price target of $45. Their rating on the stock is currently Hold.
So given this, what makes me think I should invest? Wednesday's earnings report will help. |
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| DKnightSr |
| Posted: Sat Jan 28, 2006 1:05 pm Post subject: |
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Member of the Month
May
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| Dave Rathbun wrote: | | poornewb wrote: | | Alcoholic beverage company, Got to have your morals. |
Do you?
I posted in another topic about "socially conscious investing". I am not a fan of smoking... nobody in my family smokes. I do believe that many of the companies that provide cigarettes violated laws (not to mention the public trust) with their products, their marketing campaigns, and so on. Yet I've owned Altria (formerly Philip Morris) for many years.
Why do I invest in a company that makes products that I don't now and never will use? Simple, it's my way of getting back at them. Think about this... how much money does a company make when you buy their stock? Zero. Nada. Zilch. Unless you're buying into a public offering any money to be made from the sale of company stock goes to the owner of the stock, not the company. So MO is not making money from my investing, I am.
The fact that they are currently paying 4.3% dividend is a nice bonus too.
So yes, you can make a "social statement" and refuse to buy BUD on moral principals. Or MO for that matter. I don't know if that was nelaina's reason or not, and if they choose not to say that's fine. I was just curious. |
I have to agree with Dave- When you buy the stock the company gets nothing. You're not supporting them, you're making money on their backs. Not all bad when you think about it from an SRI view. |
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| Im Not Warren Buffett |
| Posted: Sat Jan 28, 2006 1:08 pm Post subject: |
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CFO
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| Dave Rathbun wrote: | I'm trying to get used to E*Trades various research tools. (I was a Harris Direct customer and E*Trade bought them out.) The S&P report (released Jan 21, 2006) has the following quote that you (INWB) would appreciate, as they use DCF to help arrive at a target price.
| Quote: | | Our 12-month target price of $45 blends our DCF and P/E analyses, giving more likely weight to the latter. Our DCF model calculates a $53 intrinsic value using a 9.0% cost of capital and a 2.4% five-year growth rate. Applying a below historical average P/E ratio of 16X to our 2006 EPS estimate of $2.68, we get a $43 value. |
So based on two different ways to analyze the company they arrive at 12 month price targets of $53 or $43, applying a weighted average results in a price target of $45. Their rating on the stock is currently Hold.
So given this, what makes me think I should invest? Wednesday's earnings report will help. |
We all know how much I love DCFs, but I'd be interested to see how they arrive at an intrinsic valuation of $53. Estimated 5-year annualized growth is 7.4% according to Yahoo, and I need to double that to 14.8% and treat cash-flows as if its a start up to get $54. My estimate? Mid 30s, and I'm feeling generous. |
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| Dave Rathbun |
| Posted: Thu Feb 16, 2006 5:08 am Post subject: |
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FWIW, I purchased BUD on Feb 9, 2006 at $40.45. Check back in about 6 months and we'll see where the money went.  |
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| vetelmo |
| Posted: Sat Feb 18, 2006 8:10 am Post subject: |
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| Dave Rathbun wrote: | | FWIW, I purchased BUD on Feb 9, 2006 at $40.45. Check back in about 6 months and we'll see where the money went. |
Good Luck! |
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| Dave Rathbun |
| Posted: Fri Mar 17, 2006 12:45 pm Post subject: |
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CFO
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| One month later: BUD closed today at $43.32, up 6.88% from my purchase last month. |
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| Dave Rathbun |
| Posted: Thu May 25, 2006 9:29 am Post subject: |
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CFO
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| Latest quote for BUD is 46.58 up nearly 15% from my purchase in February. It's not a sexy home-run type of investing, but 15% over 3 months works out to 5% per month. I originally planned to hold the stock until it reached $50 per share or one year, whichever came first, and then evaluate the position. If it gets to $50 within the next few months I will continue to hold, looking for further strength in the recovery. |
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| Dave Rathbun |
| Posted: Thu May 25, 2006 9:44 am Post subject: |
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Here's a link to Yahoo on a 3-month chart showing a comparison of BUD versus the S&P 500 over the past 3 months.
http://finance.yahoo.com/q/bc?s=BUD&t=3m&l=on&z=m&q=l&c=%5EGSPC
And a "live" graph of the past 6 months price history for BUD:
My purchase was Feb 9, I got very lucky and just about found the bottom in this pattern. That doesn't happen very often for me.
To answer a question, how to know when to sell? As mentioned in the prior post, I set a goal of 1 year or $50 per share to evaluate the stock. If I hit $50 too soon, that implies that there is additional growth in the stock. If after a year I still have a positive position on the stock I will hold, unless the stock has gone up too much at which point I sell part of my holdings. Probably enough to preserve my original capital.
For example, suppose I bought 100 shares @$40. I have invested $4,000 (plus commission, but I'll ignore that for now). Suppose that after a year the stock is up to $55. I think that is a bit too far too fast, and I want to take some money back. I might consider selling about 75 shares which would return me $4,125 and still have 25 shares worth another $1,375. In that way I preserve my capital, have $$$ to invest in something else, and still have 25 shares of BUD that are essentially free.
What would a $125 return on a $4,000 investment look like over a year? only 3.125%, which isn't much. But it's in the range of a more conservative CD return, and I still have 25 shares of BUD that are free and clear. If you take the extra shares into account, the return is 37.5% which is much sexier.
If the stock turned completely around and was sitting down at $30 at the end of the year, I would re-evaluate and see if the reasons I purchased the stock are still valid. If not, I would have to consider selling (at a loss, of course). If they are, I would likely add to my holdings, reducing my overall per-share cost.
Next report in about two months, I guess. |
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| frusnak |
| Posted: Thu May 25, 2006 11:50 am Post subject: |
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CFO
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Nice move in price and good point on your strategy. Buttwiper..I mean budwiser isn't a very good beer,IMHO, but they make money. I guess because they have so many brewerys.  |
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| vetelmo |
| Posted: Thu May 25, 2006 1:49 pm Post subject: |
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Around here is you ask "Anyone up for a Bud?" they don't think Budweiser, lol.  But thats cuz it's a hippy town! |
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| bobis |
| Posted: Thu May 25, 2006 2:14 pm Post subject: |
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Investing Sr. Associate
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| My mothers favorite beer is Grupo Modelo bucase she perfers darker beers. How about that Natural lite beer I see a lot more people drinking that beer? |
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| frusnak |
| Posted: Thu May 25, 2006 2:49 pm Post subject: |
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| vetelmo wrote: | | Around here is you ask "Anyone up for a Bud?" they don't think Budweiser, lol. But thats cuz it's a hippy town! |
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