I am buying Anheuser-Busch (NYSE: BUD) for my retirement account. The main thesis for investment is valuation: at a recent price of $47.50, A-B is trading at an estimated 2005 P/E of 16, which is at the low-end of its historical valuation. Over the past ten years, A-B has consistently increased its sales, earnings and dividends per share, and also reduced its number of shares outstanding. I think the stock is depressed because the market is worried about increased competition due to the popularity of wine and spirits. However, I believe the company’s new marketing initiatives (like its recent launch of Budweiser Select and B-to-the-E beverages) and its significant exposure to China will drive long-term growth.

Comments are closed.