CUERVO* MM

Becle SAB de CV

Consumer


Presented:01/26/2018
Price:MX$34.10
Cap:$8.16B
Current Price:MX$28.85
Cap:$6.89B

Presented

Date01/26/2018
PriceMX$34.10
Market Cap$8.16B
Ent Value$6.69B
P/E Ratio42.62x
Book ValueMX$11.76
Div Yield0%
Shares O/S3,596.00M
Ave Daily Vol1,228,565
Short IntN/A

Current

PriceMX$28.85
Market Cap$6.89B
Becle SAB de CV engages in manufacture, distribution, export, import, bottling, and marketing of alcoholic and non-alcoholic beverages. Its product portfolio includes tequila, whiskey, and rum. The company was founded on November 5, 2002 and is headquartered in Mexico City.

Publicly traded companies mentioned herein: Becle SAB de CV (CUERVO* MM), Brown-Forman Corp (BF/B), Constellation Brands Inc (STZ), Diageo PLC (DEO; DGE LN), Pernod Ricard SA (RI FP)

Highlights

Family-controlled Becle SAB (CUERVO* MM, or “Cuervo”) is best known for its tequila. Jose Cuervo is ~40% of revenue, and in total tequila represents ~50% of the business. Taking a step back, the presenter sees the Mexican spirits company as a “mini Diageo; it’s a valuable, ‘scarce’ asset with meaningful room for growth”. He is long at 34 MXN, and believes shares can rise to at least the 45 - 55 range over the next two years as the category grows and margins improve. He bases this on 27x $1.75 - $2.00 of EPS in 2019, or 16x - 18x his EBITDA target. There is also optionality around M&A, as Diageo tried to buy Cuervo for 20x EBITDA in 2012, and any other global spirits company might view it as a strategic asset.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.