Wednesday, June 10, 2015

Seeking Alpha: SABMiller Can Still Sell A Self-Improvement Story

The dominant question for SABMiller (OTCPK:SBMRY) and the shareholders of this large brewer remains that of whether or not Anheuser-Busch Inbev (NYSE:BUD) will bid for the company to create a global titan in beer. Although I can understand some of the appeal of such a deal (very complementary market exposures and compelling operating scale), I think there are so many obstacles in the way of a deal that it is no better than a "maybe" at this point.

Can SABMiller do well enough on its own merits to justify buying or holding the shares today? The best I can say is "maybe", as my base-case expectations for long-term volume and revenue growth and margin improvement suggest the shares aren't very cheap today. Then again, global staples often maintain higher multiples than would otherwise seem fair and SABMiller still has significant opportunities to drive higher margins and returns on capital and the company does have that attractive kicker of heavy leverage to emerging markets with below-average current consumption patterns.

Read the full article here:
SABMiller Can Still Sell A Self-Improvement Story

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