In light of Cinco de Mayo, five Latin American alcoholic beverage companies with the strength to weather further waves of the coronavirus outbreak are Ambev SA (BSP:ABEV3, Financial), Union de Cervecerias Peruanas Backus & Johnston SA (LIM:BACKUAC1, Financial), United Breweries Co. Inc. (XSGO:CCU, Financial), Bodegas Esmeralda SA (BUE:ESME, Financial) and Vina San Pedro Tarapaca SA (XSGO:VSPT) according to the All-in-One Screener, a GuruFocus Premium feature.
Cinco de Mayo background
According to History.com editors, Cinco de Mayo commemorates Mexico’s victory in the Battle of Puebla, with traditions ranging from military parades and other festive events.In the U.S., the holiday celebrates Mexican culture and heritage, including the consumption of Mexican beer and tequila.
As such, investors might seek opportunities in Latin American companies that primarily produce alcoholic beverages. The GuruFocus All-in-One Screener listed five companies that have strong balance sheets according to the GuruFocus financial strength rank.
Ambev
Ambev produces, distributes and sells beer products to multiple countries in Latin America. GuruFocus ranks the Brazillian beverage company’s financial strength and profitability 8 out of 10 on several positive investing signs, which include debt ratios that outperform over 86% of global competitors and profit margins that outperform over 88% of global alcoholic beverage producers.
Gurus with holdings in U.S.-based Ambev shares (ABEV, Financial) include Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Pioneer Investments (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio).
Union de Cervecerias Peruanas
Union de Cervecerias Peruanas produces and sells malt liquors through brands like Crystal, San Juan and Real Fiesta. GuruFocus ranks the company’s financial strength 8 out of 10 and profitability 10 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, robust interest coverage, debt ratios that outperform over 89% of global competitors and operating margins that have increased approximately 6.90% per year on average over the past five years.
United Breweries
United Breweries produces beer, wines and spirits primarily in its domestic Chilean market. GuruFocus ranks the company’s financial strength 7 out of 10 on the back of debt ratios outperforming over 61% of global competitors and a strong Altman Z-score of 3.16.
Bodegas Esmeralda
Bodegas Esmeralda produces and exports red, white, pink and sparkling wines. GuruFocus ranks the Argentine winery’s financial strength 9 out of 10 and profitability 10 out of 10 on several positive investing signs, which include robust interest coverage, a high Piotroski F-score of 7, debt ratios that are outperforming over 96% of global competitors and a return on equity that outperforms over 88% of global peers.
Vina San Pedro Tarapaca
Vina San Pedro Tarapaca produces a wide range of wines in Chile and international markets. GuruFocus ranks the company’s financial strength 6 out of 10 on the back of equity-to-asset and debt-to-equity ratios that outperform over 66% of global competitors.
Disclosure: No positions.
Read more here:
- Francisco Garcia Parames’ Cobas Funds Buys 4 Stocks in the 1st Quarter
- Tom Gayner Buys 5 Stocks in the 1st Quarter
- Top 5 Buys of David Carlson’s Elfun Trusts in the 1st Quarter
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
