Many people are afraid of the next economic crash, especially stock investors. But do you know who’s not afraid? The breweries! That’s because whenever the economy is doing badly, people drink more beer.
It makes sense: If the economy is in trouble, you have to get drunk to forget all the bad things as quickly as possible. Beer is cheaper than wine, so people drink beer when money is tight.
That’s why I as a stock investor was very happy to hear that the Belgian-American brewery group Anheuser Busch has a very good value rank of 76 and a higher growth rate than 85% of its competitors. It’s, therefore, a good insurance against recession.
Unfortunately, with only one point in the security ranking, the security of this stock is less than stellar, which means that the brewery group is financed in a much riskier way than comparable stocks.
For a company of this size, I can’t imagine that that is the case, which is why I am checking up on the numbers on the Reuters website because they have industry comparisons.
However, Reuters confirms our analyses because the liquidity of Anheuser is significantly worse than the industry, which can be seen from the low quick and current ratio. In addition, the company has three times more debt than the average. The reason: The company has imposed the largest obligation of all times in the beer industry, as the Financial Times reports.
In a downturn, this is a problem: Companies with higher debt will go bankrupt more quickly. Therefore, stay away from Anheuser Busch. I prefer local breweries anyway, such as the one in Restaurant Bank here at the Helvetiaplatz, where I shot this video. A beer with friends is better than a stock in bankruptcy.