Stocks to Quench Your Thirst (Part 1)

Top Local Beer Stocks Deserve Global Investor Attention

Many countries have local beer companies with excellent investment prospects. Global players rely on them for profit and for top-line growth, and strengthen their strategic market positions as well. Most of these companies have established distribution channels with deep market penetration and strong links with national regulatory networks as well. These companies are always active in merger & acquisition moves, buying stocks of their peers, while they remain open for approaches by others as well.

Small investors should search for stocks of such companies and add them to their portfolios, whether directly or through financial institutions. These stocks offer attractive dividends, and can appreciate sharply if in transient manner, whenever rumors of consolidation circulate in the right circles. The sector has almost assured organic growth even if merger and acquisition moves do not fructify. High cash generation enables these beer companies to enter new segments of local economies, though investors should be sanguine to unload their stocks at such junctures, to avoid the value losses of long gestation investments.

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Scottish and Newcastle (S&N) is a top beer company, the stocks of which should appeal to investors everywhere. The company is not just a leader in its home country of the UK, but has sizeable market and brand shares in 15 of the most important beer consuming countries: in fact, it is a leader in both France and Russia. It has creative associations with its peers to control breweries in former Soviet Bloc countries. S&N has achieved global stature in just 2 decades, after a long and illustrious history in its home market. A major reason for its success is that S&N has built a judicious blend of national and global brands. The company has been able to cater well to local tastes, while imparting the world-wide qualities of British beer habits, at the same time.

S&N has significant presences in business areas related to mineral water, cider, and other beverages without alcohol. This certainly enhances company profitability, while safeguarding stocks against possible future downturns in main-line revenue lines. These ancillary product categories also leverage some of the company’s important competencies in manufacturing and logistics, and have significant business potentials in emerging countries.

S&N’s 2006 revenues were over $8 million with steady margins. It is a company to quench all forms of your thirst, and has a great future. The company’s stocks can add substantial and unique values to all portfolios.

Stocks to Quench Your Thirst (Part 1)