Stock Watch - Stock pick — AB Inbev
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Drikus Combrinck from Capicraft chose AB Inbev as his stock pick of the day and and Petri Redelinghys from Herenya Capital had no stock pick. Combrink said:
"AB Inbev has lots of debt because the bought SAB brewery, they have volume problems in some of the traditional markets but they're still expanding margins. You've got a premiumisation and it was also my stock pick last week and it's cheaper, enough so I'm buying and I'm buying more. I'll continue buying even though there's a lot debt and it's a defensive company. Yes they might cut the dividend, so what. If you're a long term shareholder the dividend where it is paid or used to pay back other stuff it's fine. The lower oil price benefits them tremendously because they have transport a lot of the stuff across their vast footprint. So a lower price is actually very nice for their margins."
"AB Inbev has lots of debt because the bought SAB brewery, they have volume problems in some of the traditional markets but they're still expanding margins. You've got a premiumisation and it was also my stock pick last week and it's cheaper, enough so I'm buying and I'm buying more. I'll continue buying even though there's a lot debt and it's a defensive company. Yes they might cut the dividend, so what. If you're a long term shareholder the dividend where it is paid or used to pay back other stuff it's fine. The lower oil price benefits them tremendously because they have transport a lot of the stuff across their vast footprint. So a lower price is actually very nice for their margins."
