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From my blog... http://caps.fool.com/Blogs/ViewPost...118238083724724
BUD really worth $65 a share? My BUD play.
June 12, 2008 – Comments (4) | RELATED TICKERS: BUD
In financial terms, NO. But BUD has something many other companies do not have. A super-brand. That is the only thing which justifies a $65 buy-out price. My advice to any long-term BUD stockholder's is...SELL. Preferably sell right now. Get out. Take your profit. The deal is questionable. Why? Nationalist opposition has arisen (www.saveab.com) to prevent BUD from being sold to foreign investors. I advise profitting now because the price is close enough to the $65 bid price that you might as well take it and leave. If the deal falls through, BUD's stock price will plummet to the high $40's. Do not risk getting caught in that landslide. If the bid is accepted, so what? You would have gotten out at just under the bid price and still profitted handsomely.
My own estimates of BUD's value in strictly financial terms (not taking into account qualitative aspects such as brand), is that BUD is worth $28 billion or $39 a share. $47 a share is what I value BUD currently. This is the justification behind my prediction that if the deal falls through, the stock price will plummet to the high $40's. BUD's financial quality is stagnant. It is not losing money, but it is not growing. They have too much debt on the balance sheet in my opinion and it has been increasing the last four quarters.
But again, we come back to BUD's qualititative factors. The Anhueser-Busch brand. That in itself represents a huge chunk of BUD's intrinsic value. Will I say BUD is worth $39 a share as a take-over value. No. This estimate does not account for qualitative values.
My playbook on BUD if I were a long-term shareholder is...Sell now, take profit, and if the deal falls through, buy BUD again at a much lower price.
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