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Goldman Sachs Upgrades Compania Cervecerias Unidas to a “Buy”

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Price movement of Compania Cervecerias Unidas

Compania Cervecerias Unidas (CCU) has a market capitalization of $3.6 billion. It rose by 1.8% to close at $19.44 per share as of January 15, 2016. The stock’s price movements on a weekly, monthly, and year-to-date (or YTD) basis are -4.2%, -6.5%, and -10.3%, respectively.

Technically, the stock has broken its support and is trading below all of its moving averages. Currently, CCU is trading 7.5% below its 20-day moving average, 12.4% below its 50-day moving average, and 11.8% below its 200-day moving average.

The Schwab Emerging Market Equity ETF (SCHE) invests 0.05% of its holdings in CCU. The ETF tracks an index of emerging markets companies weighted by market capitalization. Its YTD price movement is -8.2% as of January 14, 2016.

Compania Cervecerias Unidas’ competitors’ market capitalizations are as follows:

  • Molson Coors Brewing (TAP) — $15.9 billion
  • Diageo (DEO) — $65.0 billion
  • Anheuser-Busch InBev (BUD) — $186.1 billion
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Goldman Sachs Upgraded CCU

Goldman Sachs has upgraded Compania Cervecerias Unidas’ rating from a “neutral” to a “buy.”

Performance of CCU in fiscal 3Q15

CCU reported 3Q15 net sales of 353,000 million Chilean pesos, a fall of 16.1% compared to net sales of 304,000 million pesos in fiscal 3Q14. Its net income and EPS (earnings per share) rose to 21,000 million pesos and 56.0 pesos, respectively, in fiscal 3Q15, compared to 15,000 million pesos and 40.4 pesos, respectively, in fiscal 3Q14.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of CCU are 24.0x and 2.4x, respectively, as of January 15, 2016.

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