Just Say NO to BUD

JUST SAY NO TO BUD

A Social and Economic Commentary

The Stock Market is the proverbial and quantitative manifestation of money and monetary value in this country. The epitome of the free market economy where companies are traded for, bought and sold, evaluated, analyzed and capitulated about. Fortunes can be won and lost in a day with individual equities going sky high, out of nowhere, based on buzz and a promising business plan. The next disruptive technology, the newest app, the perception of the hottest anything can easily propel a company’s stock to an over exaggerated evaluation quite rapidly, even despite superior fundamentals elsewhere in the marketplace.

Stocks can go down just as fast as they go up, if not faster, based on a bad quarterly report, a negative research report or just a negative rumor can start a downward spiral.

The market is about money and turning a profit, winning, and “profits not people” in daily monetary madness.

On Wall Street, there are dozens of ways to make money and multiple opportunities to do so each and every day. News organizations such as CNBC, MSNBC, CNN, FOX and Bloomberg all reporting up to the minute market commentary, and things can change very rapidly.

Momentum investing is just one such example how money can be made based on public perception and a percentage move up or down, coupled with a timely and well placed “bet” or investment. It’s an understatement to say that there are more ways to make money on wall street than all the craps tables in Vegas, and no doubt the action can be equally wild.

Given this as a background, I believe through pronounced market action we (the average citizen), can simultaneously deliver an important declaration from Main Street to Wall Street.

Elections may come every two and four years, but if you can vote your conscious in a Facebook post regarding taking a knee, then you cast a “No” Vote by selling an individual equity.

That’s the plan!

What’s the strategy? The strategy is the “Just Say No To BUD”-weiser” – Boycott Budweiser Campaign; and here is what I am asking you, the American public, to do.

SELL YOUR BUD Stock and don’t look back. Remove it from your personal portfolios and call on your fund managers in diversified mutual fund accounts and ask that they sell it too.

Now hear me out because I have got some very valid financial reasons for you to execute your sell orders in BUD – and since BUD Stock is within points of its 52 week high of $126.50, if you are already long, you most likely own it a nice profit, and I want you to take that profit and make money!

Accordingly, we can call Budweiser trading at a 52 week high as reason number one to SELL BUD STOCK. Go ahead… DUMP IT, Ba-BYE BUD!

I have a laundry list of financial reasons that I feel Bud is overvalued and worth selling, but truthfully, the real reason I’m asking you to sell and short Budweiser is to make a point:

As a citizen of the United States of America, are you fed up and any one of the following?

You as a citizen, are tired of the bullshit and misinformation that is propagated at the highest levels of authority in this country.

You are tired of the blame game. You are tired of the constant pandering to the benefit of the special interest groups rather than the best interests of the American people.

You are tired that our own government has become a huge part of the problem rather the solution.

Now, I’m sorry BUD, but you are being used as a metaphor for what is wrong with America, and your stock is nothing more than a monetary measuring stick. And quite frankly, I feel it’s a sub-par investment at this time.

With that in mind my fellow Americans I implore you to Sell BUD IF:

If you want to stand up or take a knee for real change.

If you are favor of civil rights.

If you are against medical discrimination.

If you are against racial discrimination.

If you are in favor of human rights.

If you are for a free market economy, for free enterprise and free trade.

If you believe and agree, that Big Alcohol, Big Pharma and Big Tobacco are just 3  examples of the problems caused by the special interest groups that are bankrolling our politicians in an effort influence public policy for their own selfish purposes.

If you are for the right to do with your own body as you choose.

If you are against the Terrorist Groups and Drug Cartels benefitting from poor public policy.

If you believe that our school systems should be benefiting from better public policy.

If you are for the legalization of Cannabis for Medical Purposes.

If you are for the legalization of Cannabis for non-toxic euphoria in a responsible adult use market.

If you agree with the any or all of the above statements, then please cast your vote #grabyourwallet and SELL YOUR BUD and Pull the Plug on BUD now!

I have plenty of financial reasons to show you that BUD is overvalued in my opinion, and that your investment dollar is most likely better served in a long position elsewhere for the time being, and that a short position in BUD, might be merited.

For instance, BUD stock represents one of the weaker sisters within the alcohol and beverage sector: They are ranked 61st among the 197 stocks ranked in the industry group, by the Investor’s Business Daily.

Does 61st, sound like best in anything to you? It’s not!

In fact, BUD is not even ranked in the top 25% of its competitors.

A further quantitative analysis again utilizing the Investor Business Daily patented CanSlim Techniques reveals that BUD’s composite rating has been sliding and is down to a “68.” That’s a D+ folks, and a far cry from the highly sought after “99” composite ranking, let alone any “A rated stock” with a Composite Rating of 90 or better.

Composite Ratings, Relative Strength and Earnings Strength are all very important factors in quantitative modeling so let’s review.

Budweiser’s price to earnings ratio is over 60 times and maintains a EPS rating of 51! That’s an F! I find the earnings multiple of 60x in BUD to be excessive and overbought and would prefer to see a more reasonable valuation of 30x to 40x earnings and would reconsider reentry at that much lower level.

Bud is reporting earnings this afternoon. As of last night, 10/25/17, BUD closed at $121.56. Historically, the third quarter is their best quarter and BUD has most likely risen in advance of this news, and in my opinion, a strong quarter will yield the typical “buy the rumor – sell the news” reaction. Or worse, a short fall on expectations will trigger a more robust sell off. The 10 day moving average is already starting to trend lower and if it breaks the 50 I expect further and immediate downside.

What about Book Value?

Budweiser’s book value is currently 3.3x book, although it’s not completely unheard of for a company to trade at 3x book value,  I feel it’s a bit rich! Certainly there is no denying the fact that whatever value you attribute to Budweiser company stock now, it obviously would be a much more compelling value trading at a lower book value of 2 times, and discounted price of around $80 per share, versus current valuations and price, so I say, “let’s help it get there!”

Budweiser’s Accumulation Distribution rating is currently their best ranking – scoring a B. It was a B+ a week ago, so I believe the shift is ripe to occur. I assure you, if you start to SELL BUD STOCK, that ranking will degrade quickly to a C and possible worse.

The more you sell Budweiser stock, the lower that Accumulation Distribution number will go, and if the stock is selling off and losing points, like I absolutely want it to do, sell disciplines will be triggered, such as stop loss orders. Selling begets selling. In addition, if this occurs, different sell programs can easily take hold based on momentum and negative indicators within the stocks charts.

Keep in mind Budweiser’s relative strength ranking is a 61 that’s a D-Minus!

Relative strength can easily forecast a company on the brink of decline. I don’t think it will take much to push BUD off a cliff.

If history is any indicator, Bud fell apart right after earnings last year and went from $128 and change on 10/19/2016, to below $100 dollars a share on 12/1/16.

I would imagine a similar pattern will emerge, perhaps worse this time. Personally I wouldn’t take the risk as I strongly believe that the 5 most dangerous words on wall street are, “THIS TIME IT IS DIFFERENT!”

Other Negative factors that BUD showcases are their poor current ratio (.82), as well as BUD’s high Total Debt to Equity number (143), and their complete lack of growth from an EPS standpoint in the last 3 quarters.

I am sorry BUD, but I cannot endorse your business model, nor your business.

I have to say, SELL BUD!

But there is a bigger picture:

Big alcohol is responsible for more deaths per week in America than all illegal drugs and prescription pills combined. Alcohol is an epidemic from a death toll standpoint and highly toxic, yet completely legal.

However, zero deaths have been recorded from cannabis in this country, yet it remains illegal, because it serves as competition to the monopolies of the alcohol and tobacco industries. Furthermore, the valuable medicine contained in Cannabis poses a major threat to big pharma, who works hard to circumvent legalization through lobbying groups such as “The partnership for a Drug Free America.”

Sad that in the land of the free and the home of the brave, items that are lethal are legal, yet natural plant based medicine such as cannabis, is illegal.

I don’t think we can further afford to turn a blind eye to the actual ills of this country.

I think it is time for a change, and I think we can do better if we operate as a group and work together as one nation.

It is for all these reasons and more that I ask you to JUST SAY NO TO BUD.

Please Sell your BUD stock as means to send a message to wall street and to the country that “We The People” want to abandon the old ways and want to endorse a different pathway with different results for the betterment of all American Citizens.

 

Thank you.

Alexander Nachman

#JustSayNoToBud #SellBud #DumpBud  #BoycottBud #WeThePeople #MakeAmericanGreenAgain #CannabisCures #grabyourwallett

 

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