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A Clear Winner Is Emerging From The 'Megabrew' Merger

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By: Jim Nelson of Street Authority

The "King of Beers," AB InBev (NYSE:BUD) has had some problems of late. To solve them, the $178 billion maker of Budweiser and Corona is doing what any large company does in that situation. It's trying to buy a better company and steal their growth.

You may recall the enormous $52 billion merger between Anheuser-Busch and InBev back in 2008. Some investors -- and beer drinkers -- never truly forgave the maker of Bud for relocating overseas. Yet, I don't think that's what's causing the company's operating mess today.

AB InBev suffers from the simple problem of too few drinkers. For the first time in 30 years, beer volume is set to decrease globally this year.

To make matters worse, the major beer makers like InBev have been forced to compete with an explosion of craft beer and smaller breweries like Dogfish Head and New Belgium.

The volume of craft beer sold in the United States has more than tripled over the last decade: Continue reading "A Clear Winner Is Emerging From The 'Megabrew' Merger" →

In A Stormy Earnings Season, These Two Sectors Should Be Safe Havens

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By: Joseph Hogue of Street Authority 

In June, as the third quarter got underway, consensus profits for companies in the SP 500 were expected to show a modest 1% year-over-year dip. Three months later, analysts now think profits will slide nearly 5%, from year-earlier levels.

Of the companies that have announced guidance, 76 expect negative EPS growth for the third quarter according to FactSet Research. That compares to only 32 companies that have issued positive guidance for the three-month period so far.

The pain continues to build in the energy and materials sectors, but many other sectors are seeing downward earnings revisions as well. Fear of higher interest rates and declining earnings growth led an 8.6% drop in the SP 500 index, and a sharp spike in the VIX volatility index since mid-August.

The trend is so bad that analysts are expecting earnings growth of just 0.6% in the fourth quarter. The revenue picture is equally challenging.

Analysts think that third-quarter sales fell 3.3% against the same quarter last year. On a full-year basis, they are modeling for a 2.4% drop in sales. Unless revenue growth returns soon, investors may start questioning whether corporate management teams can squeeze further earnings growth from continued cutbacks. Continue reading "In A Stormy Earnings Season, These Two Sectors Should Be Safe Havens" →

These Six Gold Companies Could Create Exceptional Wealth Sooner Than You Think

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For smart investors watching the gold-Dow ratio rather than mainstream media headlines, this is an exciting time to be a precious metals investor. The world seems to be conspiring to push the price of gold higher, with continued zero interest rates, Chinese stock market volatility and more unrest in the Middle East. In this interview with The Gold Report, Gold Stock Trades Editor Jeb Handwerger lays out his short list of junior mining companies that have been actively adding value, and that will be in demand when all eyes are on the sector.

jebchartcover

The Gold Report: In your last interview with The Gold Report, you said that a Federal Reserve interest rate hike would be the best thing for gold. As we now know, the board decided to keep rates at almost zero. How does that impact your projections for precious metals? Continue reading "These Six Gold Companies Could Create Exceptional Wealth Sooner Than You Think" →

Are These The Greatest Success Stories In Europe?

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By: David Sterman of Street Authority

It's been five years since the Financial Times first made use of one of the less flattering economic acronyms: PIIGS. Back then, Portugal, Ireland, Italy, Greece and Spain were seen as economic basket cases, and it was widely assumed that one or several of them would eventually default on their massive debt burdens.

While such an event has yet to pass, Greece remains quite sickly, and Portugal and Italy continue to wrestle with profound economic dislocation. To varying degrees, these countries have failed to embrace the badly-needed economic reforms that are essential to sow the seeds of a lasting economic recovery.

Yet despite heavy odds, Ireland and Spain are clearly on the comeback trail. Thanks to broad-based reform packages, their economies have begun to turn the corner. And with the aid of a very competitive currency, their futures are looking far brighter than most would have suspected just a few years ago. For investors, exposure to these dynamic turnaround stories can be had through a pair of country-specific exchange-traded funds (ETFs).

Ireland Is Back In Business

Ireland and its citizens are remarkably resilient. They have been through myriad crises over the past two centuries, and always manage to bounce back. Most recently, they saw the country's economy crash and burn in the economic crisis of 2008-2009. Irish banks eventually grew so weak that a wave of bankruptcies were a real possibility. By 2012, unemployment in the country had risen to nearly 15%. Continue reading "Are These The Greatest Success Stories In Europe?" →

No Fed Rate Hike Good For Gold, Bad Sign For Economy

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The much-anticipated decision by the Federal Reserve Board at the Sept. 17 meeting to hold interest rates near zero was met in the resource community with a mixture of relief and disappointment. The 9-to-1 vote citing global economic pressure on inflation left open the possibility of a hike at the December meeting. The Gold Report asked the experts in the resource sector what this means for precious metals and oil prices, and what signs they are looking for that a different outcome will be announced in December.

Fed announcement

Joe McAlinden, founder of McAlinden Research Partners and former chief global strategist with Morgan Stanley Investment Management, was disappointed that the Fed "blinked." He called the decision irresponsible and attributed it to worries about China's growth. The veteran investor saw the status quo as bullish for precious metals and oil, but warned, "As the Fed continues to postpone moving towards normalization of interest rates, the potential for future inflation from years of excessive stimulation increases with every delay of the end of the zero interest rate policy."

He continued, "Based on today's decision, we now need to watch economic data from China and the performance of the markets themselves. I do not believe that the Fed's focus on those points is appropriate. Nonetheless, it is now clear that these will influence the timing of the next Fed move. Also, and more appropriately, we should be watching average hourly earnings, overall signs of strength or weakness in the U.S. economy, and the trend of the core PCE deflator." Continue reading "No Fed Rate Hike Good For Gold, Bad Sign For Economy" →