Company Tags: Anheuser-Busch (BUD); Fosters (FBRWY); Kirin Brewery (KNBWY); Kyowa (KYKOF); Terumo (TRUMF); Medarex (MDEX); Medicis (MRX) Allergan (AGN)
11am ET…January 31, 2008 — Comment on Markets, Companies & Events in the News
Suds and Drugs…and Japan
You know it’s the week before Super Bowl, when the financial news networks showcase beverage companies. Absolut Vodka has been making the rounds. It is part of the V & S Group, which is owned by the Swedish government. Its web site is entertaining and informative. Last July, the government began looking at ways to divest. That usually means IPO.
A myth to regularly resurface is buying “Budweiser stock”, Anheuser-Busch (BUD: $47.30), since its Super Bowl ads are among the best. This hasn’t been a good idea for the past four years. The chart below illustrates no correlation whatsoever. Only two conclusions: (i) If you own BUD, probably a safe bet to write an “in-the-money” call; and (ii) February has been a lackluster month.
http://finance.yahoo.com/q/hp?s=BUD&a=01&b=1&c=2003&d=01&e=28&f=2003&g=d
One stock our research did turn up is Fosters Brewery (FNRWY: $5.20)…flat for a year. (A graph attached at end of this article.) Only one analyst covers the stock…and unless he’s been sampling Fosters’ wares…projects EPS at $0.37. This is not an expensive stock.
In the category of foreign breweries, we’ve written up Kirin Brewery (KNBWY: $15.30) when it was a buck lower. There is more to this company than suds, however. If your investment focus includes overseas stocks, this is one to add to your screening process. Here’s just a sample of its diversification.
Late last year, Kirin announced its intention to team up with Kyowa Hakko (KYKOF: $10.35), a pharmaceutical company that is in the process of spinning off its chemical and food businesses to concentrate on drugs. Kirin is expected to invest $2.6 Billion. Earlier in the year, it announced an alliance with Terumo (TRUMF: $49.50), a leading Japanese medical equipment maker.
Here’s what a stock price summary table of these three companies looks like:
The inescapable conclusion is each of these companies is closer to its 52-week high than its low.
As a working example of globalization, the pharmaceutical division of Kirin, Kirin Pharma, developed break-through biotechnology with its mouse…not a PC mouse, but an actual mouse. An American biotech, Medarex (MEDX: $9.90) teamed up with Kirin, and is using that technology for a new type of cancer treatment. FDA tests are pending. As back-up to the otherwise bizarre assertion that a Japanese brewery is contributing to medical science, here is the link to the Medarex’ site — http://www.medarex.com/Development/UltiMAb.htm, from which we duplicate this section, including the photo of the mice…
Kirin TC Mouse™
“Through an exclusive partnership with the pharmaceutical division of Kirin Brewery Co., Ltd., we have access to the Kirin TC Mouse. The KM-Mouse® Together with our partner, Kirin, we have developed the KM-Mouse, a crossbred mouse that combines the characteristics of our HuMAb-Mouse with Kirin’s TC Mouse that retains the capability to produce all human antibody isotypes with an immune response we believe previously unseen in any human antibody producing mouse system.”
After the FDA gave Medarex a cool review last month, the stock sank to a low of $8.90. It has since bounced back. There may be a lesson in this for the owners of Medicis (MRX” $19.58). Medicis also received some bad news from the FDA on its Reloxin trials, off more than 10% from just a few days ago. Its principal competitor in this area is Allergan (AGN: $66.35), so naturally, AGN is on a tear. Both MRX and AGN appear to be trading vehicles for now.
POLITICAL SNIPPETS…Delegate Count… As of today, the front runners for the Democratic nomination, based on pledged delegates, shows Obama with 63 delegates to Clinton’s 48. For the Republican nomination, McCain has 93 delegates to Romney’s 59. Here’s a link to a Yahoo site that tracks this relevant election data, http://news.yahoo.com/election/2008/dashboard, updated every day.
This site also tallies “Money Raised” by the front running candidates. Clinton comes in first with $91 million. Obama is #2 ($80 mm), Romney ($60 mm), and McCain ($30 mm). An editorial in today’s New York Times points out that if Clinton is elected President, by 2017, 40% of Americans will have lived under a President Bush or President Clinton. A web site pokes fun at this prospect, Bush-Clinton Forever, projecting a Bush or Clinton president until 2057.
GENERAL SNIPPETS ~ GQ magazine features a piece that addresses the feeling you get when you send an ill-conceived email. Called “e-grets”, the article offers this guideline — “Never send an email you wouldn’t want to have read back to you in public”. Another good suggestion, just to get it off your chest, is to write the email but do not type in the address. Usually, by the time you’re finished writing, you’ll lose the urge to send what looks like, in retrospect, a heat-seeking missile.
Inc. magazine offers this — managing email isn’t just dealing with the spam and free-offers, but also managing those emails requiring responses. It is information management. “If you can’t do that”, the magazine writes, “your problems run much deeper than your in-box.”
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