Odds And Ends -- June 6, 2023

Locator: 44851INV.

BUD: link here. Not yet, but looking very, very tempting. BUD does not meet my investing criteria but sometimes things look too good to ignore. Reminder: the rest of the western world is much more progressive / woke than the US.

From the linked article:

The stock market’s reaction has also been unsubtle: Since the end of March, AB InBev shares are down 17.8%, and those of Molson Coors are up 23.6%. This looks excessive for multiple reasons. For one, it doesn’t seem to take into account the highly global nature of the company, which was formed through multiple mergers between Belgian, Latin American and American brewers, and now accounts for roughly one out of every four beers sold worldwide. [25% of all beer sold globally is sold by BUD.]

Last year, 71% of its revenue came from outside North America. Growth has also been coming from other regions. In 2022, even before the Bud Light fracas, North America saw a 4% decline in organic sales volume while all other regions saw increases. South America grew by 4.6%, for example.

Within North America, the company’s portfolio extends well beyond its Budweiser and Bud Light brands to labels such as Michelob and Hoegaarden, as well as microbrewery brands like Goose Island.

Here again, Bud Light hasn’t been the growth driver.

Michelob Ultra, a low-calorie beer marketed as fitting with an active lifestyle, increased sales in the “high-single digits” last year, the company has said.

On a conference call with analysts May 4, AB InBev Chief Executive Michel Doukeris said the total retail sales decline in Bud Light over the first three weeks of April was equivalent to around 1% of global sales by volume over the period, making a nearly 18% stock decline look dramatic indeed.

3M: bankruptcy and 3M in the same sentence is never a good sign. Link here.

In looking at a more Dow-focused market, Cramer highlighted several stocks that roared on Friday, including technology company 3M and construction manufacturer Caterpillar.

After flying high on Friday, 3M was down more than 4% at Monday’s close. 3M is in the middle of a cancer-causing “forever chemical” ground contamination lawsuit, which was postponed on Friday, likely to give both parties more time to reach a settlement.

Cramer is optimistic the settlement will not bankrupt the company, and that its stock will perform well once the litigation is over.

Cramer believes Caterpillar is largely misunderstood by Wall Street, with traders treating it like an old-fashioned cyclical stock. He noted that the company has been successfully diversified by CEO Jim Umpleby into a business that’s less reliant on the global economy, even though traders kept the stock running high on Friday, citing China’s stimulus plan. But that country represents less than 5% of the company’s current business.

Goldilocks: Jim must be reading the blog. From the same link, Cramer mentions a "Goldilocks" report.

Although Cramer chalked up most of the Dow’s Friday (June June 2, 2023) success to the debt ceiling compromise, he also pointed out that nothing exists in a vacuum — the “Goldilocks” labor report may also be a factor in last week’s Dow rally, as well as China’s stimulus package, he said. However, if not for the deal, the Federal Reserve might still be feeling pressure to pass steep hikes at their next meeting, which would throw the market out of whack, Cramer added.

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All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.