Molson Coors Canada 2

I own not own this stock of Molson Coors Canada (TSX-TPX.B, NYSE-TAP). Since Molson was bought out by Coors, the Canadian listing has been winding down. It actually is not a bad stock for Canadians as it exposes them to an international consumer discretionary stock.

As best that I can see, over the past year there has been $9.6M US$ of insider selling and net insider selling is at $9.5M US$. I do not find the US reports as easy to read as the Canadian reports. However, there does seem to be a lot of outstanding options.

As far a TPX.B and TAP goes, there are some 503 institutions that own 74% of these shares. Over the past 3 months they have very marginally reduced their shares.

I got 5 year low, median and high Price/Earnings Ratios of 10.99, 12.28 and 13.66 for TPX.B shares. The current stock price of $42.00 has a P/E Ratio of 11.20. This shows that the current price is reasonable.

I get a Graham Price of $59.81 CDN$. The 10 year low, median and high Price/Graham Price Ratios are 0.77, 0.95 and 1.13. The current P/GP Ratio is 0.70. This would suggest that the current stock price of $42.00 is low.

I get a 10 year Price/Book Value Ratio of 1.25. The current P/B Ratio is 0.99. This also suggests a low current stock price. The current P/B Ratio is less than 80% of the 10 year median P/B Ratio and the current P/B Ratio is less than 1.00. When this ratio is less than 1.00 it means that the stock price is below the book value.

I get a current dividend yield of 3.05%. The 5 year median dividend yield is 2.04%. The current dividend yield is around 50% higher than the 5 year yield and this would also suggest a rather low relative stock price.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. The consensus recommendation would be a Hold.

The 12 month consensus stock price is $43.80 US$. In CDN$ this would imply a total return of 7.52%, with 3.05% from dividends and 4.47% from capital gains.

One analyst said that he thought brewing industry would have modest profit growth driven by higher pricing and continued cost cuts as consumers are increasingly migrating to wine and spirits. He also thought consumers would "trade-up" to better select import beers and craft beers. Another analyst said that he thought the price was reasonable, but he did not see much growth in the future.

One analyst said he liked the recent acquisition in Europe and thought it was a buy because the stock is inexpensive. Another said the company owns a joint venture with Miller Coors and he did think that stock is trading at a 50% discount to what the sum of the parts of worth.

Analysts seemed to have been talking forever about beer giving way to wine and spirits and it has never happened. This is also quite a good market for craft beer. However, at the drinking establishments I go to there are plenty of people drink big brand named beer. However, I do agree that the world economy is not great and who knows when it will get better so consumer discretionary stocks may not do well, certainly in the short term.

There is an interesting Blog entry on a new product from Molson Coors and how this shows the greatest misuse of insights. See The Value Engineers. And then a blog on what Molson Coors is doing right. See article on new cans at Beverage Daily.

I think that this company will still give Canadians international exposure to a consumer discretionary stock. On a personal basis, I must admit that I do not drink much beer anymore and if I do it is from a small brewery.

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. 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.