Wine Shortage / Opportunity

[kevinlfifer]

Hi all,

Here is some free investment advise.

See attached link http://www.cnbc.com/id/101371746

China has become the largest consumer of wine. They also make the most wine as a nation. The difference is those who drink prefer the imports from Italy, France and US. I see a long term trend which will pressure wine and juice prices upward. The later being bad for us as wine makers.

STZ and DEO are good stocks to pick to try to capitalize on this potential trend. I have had my clients in STZ for years starting orice in $20s.

Just Sayin

 

[jswordy]

The big bump in STZ came from a boost they got from buying Corona Brands off InBev. I started watching this at $53, had no money to invest at the time. Not sure how much more upside there is after this run up, but maybe $20.

Plenty of bumps in the road, though. Since it's big earnings boost, STZ has been uneven and off it's year high, and the news about China's future growth has been muted. Not saying it's not a good stock, but it was far better at $20 or $50. I'm waiting now for retrenchment. It may not come, or it may come in the next quarter or two. STZ has to rapidly expand its beer marketing prowess, and the "experts" I read are divided on whether it can do it. There are always people taking the other side of the bet, too. We'll see what happens.

 

[sour_grapes]

They also make the most wine as a nation.

Where are you getting this from? It is not in that article you linked, and the United Nations' official stats organization shows them in 5th place, behind France, Italy, Spain, and the US as of 2011 (the latest available). They produced about 25% as much wine as France did that year.

 

[jswordy]

Paul, he's talking about Chinese consumption, not production.

 

[Runningwolf]

Well with growth for STZ being over 100% in the last 52 weeks and a profit margin over 43% that puts them way ahead of others in the Beverage industry. I feel leery of this stock but all the analysts like it in my research. Kevin where were you a year ago or $50 ago!

DEO I used to own several years ago and sold it at $79 (dang it) and I see now it's just under $130. I little shaky in the last year but only if I had held on it for two more years then I did. I couldn't find much from analysts on this.

Great tips Kevin. I for one always like to here about stocks from other people and then make a choice. Yes I do like Jim Cramer.

 

[sour_grapes]

China has become the largest consumer of wine. They also make the most wine as a nation.

Paul, he's talking about Chinese consumption, not production.

Jim, I don't understand why you say that. The part I bolded (and referenced the first time) is the part I am "complaining" about. Maybe I am being dense -- is there another way to read that bolded sentence?

 

[kevinlfifer]

I am a long term investor, I expect to hold 2yrs on avg. China did out produce all wine producing countries as well. That data came out 6 mo. ago or so.

my top picks to grab on pull backs are:

DDD
CAT
AMGN
GILD
LYB
LO
STZ
CY
NEE
SI
NTI
PF
FUEL

I am an RIA thru RBC so I get all that research.
PI me if you have specific questions. I am glad to help.

 

[jswordy]

STZ down again today on a rising market. Might be a good low for those of you wanting to jump in. The biggest figure of interest on this stock is a 7.9 p/e. Either it's being overlooked or there's a reason investors aren't bidding up a company that everyone says should be growthy in the future. Short interest is 3.39% of float. Up to you to decide.

I just sold CAT at the peak, $93.06. The stock never performed as it should have for the 4 years I owned it. I had it pegged in tech analysis at $140 upside, but CAT is a conservative company and its execs like to talk down its stock, a factor that pulls on it as I all too well learned. P/E 17.7. I'd be cautious. It does have a dividend, which is nice.

AMGN has been a story awhile, too, so price is a factor. It's up $40 on the annual, or 33%. That outpaced the market last year. Can it continue? Hmmm…
but again it has a dividend which is good so you can lick your wounds some if it doesn't pan out. P/E is 19.18, just below average for the market as a whole.

In a year FUEL has gone from about $39 to $72. Again outpaced the red hot market last year. Can it continue? No dividend here, you are running on all appreciation. Lost $2.72 a share in earnings.

The job of the investor who is buying a stock that has already historically run up beyond the pace of the overall market is to determine whether he or she is buying true value compared to expected performance, or whether he or she is simply serving as the "greater fool" in an emotional rush that may see them getting in just as the tide is turning. It's a tough question.

My uncle, a 30-year stockbroker, likes as a retirement hobby to take the opposite side of these run-up bets and he's made a lot of money at it. I'm still picking for issue growth, so I have to catch them sooner than some of these. I'm a long-term (4 or 5 years plus) investor, too, and as you can tell, Kevin, I'm a contrarian.

Well then, what do I like? Try PH, a big run-up stock that also has a dividend. Why? Earnings per share: $6.77 (lots of cash-flow; OMG they make money!). P/E 16.92. The global company makes flow controls. If it flows - water, gases, fuels, grain, coal, etc. - they make something to control it, so they are at the heart of global industrial processes. I'm up 74% on it in 2 years.

 

[sour_grapes]

China did out produce all wine producing countries as well. That data came out 6 mo. ago or so.

I call shenanigans. That simply is not the case. Or, as they say at WMT, pictures or it didn't happen.