Latest news with #MolsonCoorsBeverageCo
Forbes
19-05-2025
- Business
- Forbes
Molson Coors And Cigna Head My 'Do Nothing' Stock List
You probably wouldn't bet on a horse that usually finishes in the middle of the pack. But in the stock market, sometimes that's a good idea. Once a year, I write about my 'Do Nothing Club,' a group of stocks that linger near their prices from a year ago, but that I believe may levitate in the coming year. In 21 years, my Do-Nothing stocks have averaged a 14.3% return over the year following publication, beating the Standard & Poor's 500 Total Return Index at 10.1%. Of course, price stagnation in and of itself is no reason to get excited about a stock. You need something to light a spark. But just because a stock has been quiescent for a while is no reason to disdain it. Here are five Do-Nothing stocks that look promising to me now. Beer makers have had a tough time, as young people lean to other beverages. Nonetheless, Molson Coors Beverage Co. (TAP) has grown its earnings at a 16% clip in the past five years. Sensibly, Molson Coors is diversifying out of reliance on beer. For example, it sells Arnold Palmer Spiked iced-tea-and-lemonade drinks, and Simply Spiked lemonade. It also offers Dwayne Johnson's ZOA Energy drinks, and Blue Run whiskey. Will this work? I don't know, but the stock is cheap enough to make me think it's a good speculation. The shares go for under book value (corporate net worth per share). Health-care costs keep rising, making it tough for health insurers. In addition, the federal government periodically pressures the insurers to charge less, pay claims more generously, or both. In this unpleasant environment, Cigna Corp (CI) has shown a profit in 29 of the past 30 years. Its stock sells for 18 times the past four quarters' earnings, but only 10 times analysts' profit estimates for 2026. The stock is down about 4% over the past year, and I think it is likely to bounce. LKQ Corp. (LKQ) is an auto-parts recycling company. While the tariff picture seems to change every week, it looks to me as if there will be some meaningful tariffs on imported cars. If so, people may keep their old cars longer, leading to more repairs, and hence more demand for spare parts. Based in Antioch, Tennessee, LKQ has about 1,500 auto-salvage sites in the U.S., Canada and Europe. It has increased its profits by more than 12% a year over the past decade. Last year, however, was flat. The stock is selling for 0.78 times revenue. Its normal price-to-revenue multiple is 1.08. The Trump administration's tariff policy is in flux, but for now, there's a 25% tariff on imported aluminum. The U.S. Chamber of Commerce says that such tariffs hurt American manufacturing by raising costs. I agree, but I think the tariffs as they currently stand are favorable for Century Aluminum Co. (CENX), which has struggled for years. In the past 15 years, Century has had only five annual profits and 10 losses. It had a good year in 2024 and analysts think the next couple of years look good. A small-company stock I like is Preformed Line Products Co. (PLPC) of Cleveland, Ohio. It makes products used to construct or maintain telephone and utility lines. These products may provide insulation, protection, or flow regulation, among other things. Preformed Line Products had sales of about $601 million in the past four quarters, and the market value of its stock is about $683 million. It has shown a profit in each of the past 15 years. This month, the company acquired a similar outfit in Brazil, JAP Telecom. It already had a presence in Brazil. My Do-Nothing picks have beaten the Standard & Poor's 500 12 times out of 21, while averaging about four percentage points better than the index. Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future. Four of the five Do-Nothing stocks I recommended a year ago managed to beat the S&P's return of 13.8%. Banner corp. (BANR) returned 46%, Cisco Systems Inc. (CSCO) 41%, PayPal Holdings Inc. (PYPL) 17% and Sabine Royalty Trust (SBR) 14%. However, Schlumberger Ltd. (SLB) fell 21%. The five stocks together notched a 19.4% return. Disclosure: A hedge fund I run owns call options on Schlumberger. Correction: In a recent article on low-debt stocks, I misstated the return on my recommendations a year ago. Alpha Metallurgical Resources was down 57%, not up 57%. Therefore, my selections as a group rose 16.1%. not 39.8%. They still beat the S&P 500 but by a much narrower margin than I had stated.
Yahoo
11-05-2025
- Business
- Yahoo
US beer slowdown 'cyclical' and will ease, Molson Coors CEO says
The steeper-than-expected decline in US beer sales will abate in the months ahead, Molson Coors Beverage Co.'s CEO has suggested. Yesterday (8 May), the Coors Light brewer cut its sales and profit forecasts for 2025, pointing to 'the impacts of the global macroeconomic environment on the beer industry and consumer trends'. The new forecasts came as the company reported an 11.3% fall in first-quarter net sales to $2.3bn. Volumes in the US declined, with Molson Coors saying macroeconomic conditions had led to 'industry softness'. Molson Coors first-quarter results – which also included lower profits – surprised some on Wall Street and, speaking to analysts after the numbers were announced, the company's management faced a series of questions about its thoughts on how the US beer industry might fare during the rest of 2025. CEO Gavin Hattersley said Molson Coors estimated the US beer industry was 'down around 5%' in the first quarter. 'Within the guidance that we are now revising, we have assumed that the industry will be better than what we've seen at the start of the year, which was down around that 5% in Q1,' Hattersley said. 'We do expect over the balance of the year that we'll see the similar trend lines that we've seen over the last few years.' He added: 'Obviously, one quarter doesn't a year make. We talked about the consumer confidence challenges in the macroeconomic environment and, obviously, we can't predict when that will end but they are certainly cyclical and they will end. The timing of that is obviously uncertain.' Molson Coors reports its financial results across two divisions – Americas and EMEA & APAC. In the Americas, the company said its 'financial volumes' decreased 15.6% in the first quarter amid a 7.4% decline in 'brand volumes'. It also pointed to the cycling of the impact of a strike in Texas last year when distributors built inventories, as well as the end of contract-brewing deals in the US and Canada. Molson Coors said the fall in brand volumes was driven by the 'softness' in the industry, as well as the brewer lapping 'double-digit growth in our core power brands' a year earlier. Hattersley added: 'It's certainly clear to us that the incremental softness that we've seen in the industry is macro driven. We're taking actions and steps to protect our profitability in the near term but continuing to support our brands through that. 'The timing of these macro-driven trends are obviously not something that we can forecast. What we do know though is that it's cyclical and our expectation is over the balance of the year that we'll see a move back to industry trends we've experienced over the last few years. Whilst we don't have a public forecast in industry, obviously our guidance is built on our own forecasts internally as to where we see the industry landing for the full year.' The net sales from Molson Coors' EMEA & APAC division dropped 6% in the first quarter. The company's financial and brand volumes both feel more than 9%. Molson Coors pointed to 'competitive pressures' across the regions and, speaking to analysts, Hattersley said the industry in the UK 'did have a soft start to the year'. He added: 'It did continue the trend that we've seen in consumer demand in the UK last year with the market being down on a volume basis. I think as we've said consistently now for a few quarters – and this hasn't changed – is the market has been increasingly competitive.' However, Hattersley, who plans to step down as Molson Coors CEO by the end the year, said competition was picking up in the UK. 'There has been a higher promotional intensity across both channels, the on and the off premise,' he said. 'If you go across into central and eastern Europe, the beer industry remains sluggish. Again, it's driven by a decline in consumer confidence, partly because of the macroeconomic environment which exists there as well but the added negative of global political and economic tensions, which have escalated since last year. We are seeing higher promotional pressures across most of the markets we're operating in central and eastern Europe but we remain optimistic about the growth potential of our business and we're executing against our plans.' Molson Coors has recently launched its Madri beer in Bulgaria and Romania. It plans to take the Coors brand into Hungary. Robert Moskow, an analyst at TD Cowen, said the US investment bank had lowered its target for Molson Coors' shares off the back of the results and the new forecasts. 'The 2025 outlook is now for sales down low-single-digit and earnings per share up low-single-digit but we wonder if this is conservative enough,' he said. 'We think the company systemically overestimates long-term U.S. beer category at -1 to -2%. Our data indicates annual category growth of -2.7% for the past three years on a consumption basis.' "US beer slowdown 'cyclical' and will ease, Molson Coors CEO says" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. 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