Inspired by the impending takeover of SABMiller (OTCPK:SBMRY) by Anheuser Busch InBev (NYSE:BUD) (or "AB InBev"), I decided a little while ago to dig around in the beer sector to see if there were good bargains still hanging around. Heineken (OTCQX:HEINY), the world's third-largest brewer, has a lot of positives going for it, including a strong premiumization strategy, declining exposure to weaker markets, and a solid presence in several attractive markets.
What it doesn't have at this point is a discounted valuation. I accept that high-quality companies, particularly those in segments like consumer goods, often trade a premium, but every once in a while, some patience and a contrarian streak can turn up bargains. Priced for a high-single digit annual return, I think Heineken is a solid hold, but certainly not cheap enough to call it a "must buy".
Heineken Well-Placed And Well-Run, But Also Well-Valued