Tuesday, February 8, 2011

Molson Coors Canada 2

The reason I started to follow Molson’s was that it was recommended as a good stock. Molson’s was bought out in 2005 by Coors and the company became Molson Coors Canada (TSX-TPX.B) in Canada and Molson Coors Brewing Company (NYSE-TAP) in US. My spreadsheet and reviewing are basically from the view of Molson Inc (TSX-MOL.A) changing into Molson Coors Canada (TSX-TPX.B). Molson (MOL.A) reported in Canadian dollars and the new company is reporting in US dollars. So, I have used the applicable exchange rate on values reported from 2005. However, my US stuff is Adolph Coors Co (NYSE: RKY) changing into Molson Coors Brewing Company (NYSE-TAP).

There is no Canadian Insider Trading report, but there is a US one. It provides no summary, like the Canadian one does. However, it would appear that over the past year there has been more Insider Selling than Insider Buying. Since October of 2010, there has only been Insider Selling. The company has shown faith in their future earnings as they raised the dividends 20% in 2009 and almost 17% in 2010. However, Canadians did not benefit as much because of the rise in our currency.

When I look at the Price/Earnings Ratio, I find that the 5 year median low P/E Ratio is 14.6 and the 5 year median high P/E Ratio is 18. I get a current P/E Ratio of 12.3. So, this P/E Ratio is relatively low.

I get a current Graham Price of $59.25 and a current stock price of $47.22. So the stock price is some 20% lower than the Graham Price. The low difference between the Graham Price and stock price is 22% and the average difference is 6%. So this places the current stock price in a good light.

When I look at the Price/Book Value Ratio, I get a 10 year average of 1.18 and a current Ratio of 1.16. This is just slightly lower than the 10 year average.

The last thing to look at is the dividend yield. The 5 year average is just 1.8% and the current one is 2.4%. This also shows the current stock price in a good light. The stock price is shown to be reasonable and this is usually the best for which you can hope. Do not forget that when stock prices are too cheap, it can be because the stock is not a great stock, so having a cheap stock price is not always good.

When I look at the analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus recommendation is a Buy. (See my site for information on analyst ratings.) There is some concern that the beer market in both US and Canada is both competitive and mature. Some think that the stock is attractively price at the current time.

Molson Coors Brewing Company is a leading global brewer delivering extraordinary brands that delight the world's beer drinkers. It brews, markets and sells a portfolio of leading premium brands such as Coors Light, Molson Canadian, Carling, Blue Moon, and Keystone Light across North America, Europe and Asia. It operates in Canada through Molson Coors Canada; in the US through MillerCoors; and in the U.K. and Ireland through Molson Coors UK. Under the US stock exchange, this company is called Molson Coors Brewing Co. Its web site is here Molson Coors. See my spreadsheet at tpx.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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