Monday, December 11, 2017

Recent Buy: Molson Coors (TAP)

It's Miller Time


On December 11, 2017, I bought 12 shares of Molson Coors (TAP) at $80.00 a share for a total of $960.00.

It's that time of the year again. Last year the market oversold Diego (DEO) and this year it's Molson Coors (TAP). Seems like alcohol companies are sold off at the end of the year.

Quick recap

  1. Molson Coors (the people who make Coors Beer) bought the Miller Brewing Company for cheap when BUD bought SABMiller. This was an agreement with regulators to ensure BUD not steal the entire market cap.
  2. This added a lot of debt to TAP. So much that TAP froze dividends and buybacks to focus on repaying the debt at a rapid pace.
  3. Light beer is on a decline in the US for more craft beers.
  4. TAP lost US market shares to craft beers, but gained in the international market. 
  5. Unable to meet the market guidance TAP lost 30% of their market cap.
At around 2% with a fair price around $90-100 (depending on the analyst) I believe TAP is a cheap Canadian Consumer Defensive stock with more focus on cap gains than dividends. I would like to build this position to 50 shares, but unsure if I have the money for it. Currently at 19 shares. 

Forward Dividend stands at $5,694.77. 

2 comments:

  1. BDI -

    I have also been paying attention to them. Beer isn't going anywhere, so kudos to you : )

    -Lanny

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    1. hey Lanny, the thing about TAP is its frozen dividend. But at the rate they are paying down the debt I expect it to increase in a couple years or so. This is more of a cap gains play with the future for dividend hikes. I normally don't do cap gains but TAP is trading at such a discount and in a sector I wanted to invest in

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