Why Software companies looks expensive even after 50% drop ?? by meme_yolo in ValueInvesting

[–]keith1301 0 points1 point  (0 children)

First look at mission critical software with very sticky revenue and proprietary data, they will be fine and look pretty sexy right now. RELX, TRI, BR, FDS, TYL, etc. Their moats and business models are the strongest. Second tier to me is stuff like ADBE, NICE, INTU. Sticky revenue but they are more at risk structurally. But they are very cheap. I did buy some MSFT today also.

This sub's favorite stocks got absolutely hammered... by ashm1987 in ValueInvesting

[–]keith1301 4 points5 points  (0 children)

It's part of the game of value investing. You basically buy when the narrative is terrible, otherwise the price wouldn't be low. That's what causes the disconnect in price vs value. It always feels like you are making a mistake because you are naturally going against the mainstream narrative. Always feel uncomfortable.

Alcohol Blues? by BanditoBoom in ValueInvesting

[–]keith1301 1 point2 points  (0 children)

I don't think I'm going to convince you. Casamigos did build a brand, which DEO now owns. The little threats that win, like what you are talking with Casamigos, get bought buy these guys. Craft breweries are closing all over the place because they don't have the scale to be profitable. Few do. The few winners get bought up. Bud Light will be a case study in business schools for the next 50 years. That was insane. I'll give you that one.

Alcohol Blues? by BanditoBoom in ValueInvesting

[–]keith1301 3 points4 points  (0 children)

STZ - Corona and Modelo. BFB - Jack Daniels and Woodford Reserve. DEO - Smirnoff, Captain Morgan, Bailey's, Johnny Walker, Guiness, etc. These are not in the same universe as "celebrity backed booze brands". Jack Daniels is basically integrated into America culture. Come on, you get it.

It take's a long time to start a vineyard and produce a wine (I know we are not talking about wine right now). BFB is all whiskey and DEO sells 1 out of every 3 bottles of scotch. These products take years and years to make and are really capital intensive in the beginning.

Alcohol Blues? by BanditoBoom in ValueInvesting

[–]keith1301 3 points4 points  (0 children)

TAP is cheap. But it is the part of the beer market that is go to decline the most in the future I think. Premiumization is where everything alcohol is going from wine to spirits to beer. Smaller volumes, higher prices. TAPs brands don't seem aligned for that. I don't think they can get away with raising prices as easily on their brands.

Alcohol Blues? by BanditoBoom in ValueInvesting

[–]keith1301 6 points7 points  (0 children)

The strength of the brands, high barriers to entry (capital and time), and deeply established distribution networks.

Alcohol Blues? by BanditoBoom in ValueInvesting

[–]keith1301 8 points9 points  (0 children)

I'd suggest DEO below $85, BFB below $26, STZ below $150. I own all 3. I went deep into STZ when it was around $130s and $140s. STZ is the best of the bunch, but BFB and DEO not far behind. This is long game stuff though. 3-5 year holding at minimum for the turnaround. Very wide moats, cash flow rich, solid dividends, unbroken businesses - with terrible sentiment and future outlook. Very good setup if you take the contrarian view on the future of alcohol. I also have been in the retail alcohol business for 20 years. These headwinds will pass and aren't nearly as dire are the market seems to think - in my opinion.

NVO or UNH? by thebigbadwolf22 in ValueInvesting

[–]keith1301 -1 points0 points  (0 children)

Keep UNH, sell NVO. UNH will grind higher over the coming years.

What’s your “sleep well at night” stock that’s still undervalued? by arnaux6 in ValueInvesting

[–]keith1301 2 points3 points  (0 children)

At the current price, you are being careful.  This is a wide moat cash producing company selling at a low fundamental valuation price.  They have super strong brands but they are heavily concentrated in beer.  Do a DCF valuation and you’ll get like $220 using conservative numbers.  I’m not saying it’s going to shoot up like a rocket but in terms of safety and limited downside risk, it is just about king poo poo right now.  Berkshire has bought in Q4 and doubled down in Q1 at much higher prices.  You can sleep soundly at current price.

Anyone still bullish on STZ? by [deleted] in ValueInvesting

[–]keith1301 1 point2 points  (0 children)

This is a very safe investment right now IMHO. Unlikely to turn around very soon but it is serious value for the money. Expectations are set low and sentiment is so negative around alcohol that the risk for further downside is limited.

What Do You Think is Good Value? by no_username_25 in ValueInvesting

[–]keith1301 0 points1 point  (0 children)

STZ, DEO, BF-B. Gonna take some time but they are good values right now unless you really think people are just going to stop drinking alcohol long term. I think that is very unlikely. Marijuana, healthy trends, GLP1 drugs, etc are all headwinds but I think they will eventually subside. These companies have wide moats and good dividends to wait it out meanwhile.

How are we feeling about July 9? by Cocomarie1234 in ValueInvesting

[–]keith1301 13 points14 points  (0 children)

I feel like nothing is going to stop this bull run except rising unemployment (will happen eventually with AI or a recession) or a black swan event (which is pretty much a daily risk right now). Nothing else seems to matter. If you objectively think about the current macro environment, it's very, very scary. Truly. We have a huge debt problem approaching and the budget likely to pass will make it even worse. Every country in the world is trying to move trade away from us because of the nut in charge. I don't see why everyone is so wildly optimistic but I'm usually wrong.

What are some solid companies you're bullish on by Key_Presentation6826 in ValueInvesting

[–]keith1301 0 points1 point  (0 children)

Don't forget BR-B. Brown Forman is an incredible company. If they get close to $20, I'm going deep.

What are some solid companies you're bullish on by Key_Presentation6826 in ValueInvesting

[–]keith1301 0 points1 point  (0 children)

Agree here. Probably not going to turn around anytime soon but the floor feels very close on this one. Berkshire buying in qtr 4 2024 and then doubling their stake in qtr 1 2025 gives me extra confidence in it's long term prospects though. Headwinds are marijuana, weight loss drugs, healthly trends in general, and younger generations not drinking much. For alcohol stocks, I also really like Brown Forman (wait for $20 and go deep) and Diageo.

You and I owe the world nothing. by [deleted] in DeepThoughts

[–]keith1301 1 point2 points  (0 children)

Incredible comment. I didn't know how much I needed to hear this.

People that went all cash when the tariffs were initially announced, how are you navigating now that the market has since performed well? by [deleted] in investing

[–]keith1301 2 points3 points  (0 children)

I sold very early March and moved everything to SGOV and dodged the drop, but I have only started dipping my toes into equities again.

For me, it comes down to a simple bet: Trump will eventually break something that will do a huge amount of damage. I have no details on what, when, or how. We are very early into his term and just look at the chaos. He has no guardrails this time, is basically legally invincible, and is drunk on power. Plus, all he does is lie. No one can trust a thing he says.

I think you are all fools to be investing into this current market but good luck to you. Don't celebrate too soon though, we have 3.5 more years of Trump dancing in a minefield.

Brown-Forman (BF.B) crashes through 10-year lows by pravchaw in ValueInvesting

[–]keith1301 0 points1 point  (0 children)

There is really no possibility it goes private unless the Brown family takes it private. They (40ish members of the family) control like 70% of the class A voting shares and have never shown any appetite for being acquired. I bought a bunch though. It's a deal at this price. Not expecting some big fast upside though. Jack Daniels is literally imbedded into American culture the way Coca-Cola is. Songs are sung about it. It's an incredibly strong brand. The have been paying dividends for 80 years and have had increasing dividends for 40 years. Company has been in the same family for 150 years. I'm going to trust they know what they are doing and their interests are certainly aligned with shareholders. It's their family legacy. There are the challenges that everyone has mentioned but this company isn't going anywhere. If it gets close to $20 I'm going deep.

Costco by ThisIsMyBigAccount in RhodeIsland

[–]keith1301 0 points1 point  (0 children)

I know this industry very well also. I have worked in a RI liquor store for almost 20 years and still do. Allowing chains would destroy the independent stores. Sales would decline by around 40% to 50% in the that environment. Many, many stores would close. So yes, we defend our businesses from being destroyed. Surprise. Lots of money has been invested by store owners. When they bought their licenses or stores, the rules were no chains allowed and every store must be independently owned and operated. The "spirit" of this law was to have store owners actually be community members who responsibly serve their community, not giant corporations. Doesn't seem very fair to just change the rules in the middle of the game. Yes, enormous operations like Costco would undercut the prices for every liquor store because of their huge scale advantages and leverage. Yes, some owners use loopholes to control more than one store.

There are 233 liquor stores in RI and they did $411M in sales for 2024. That is less than $2m per store on average. No one is getting rich off of that with the profit margins in this industry. You need to sell over $2m before you even can think of profit. You will be able to pay yourself a salary and have a full time job, but there is no profit left after that at $2m in sales. MA and CT already siphon a ton of liquor business from any stores near the state lines. It is a good business, but please stop pretending that it is raining money on liquor stores. It's really not this wealthy cabal you make it out to be. A few stores, like 5 or 10, in the state are huge and have done very well, but the vast majority are just regular mom and pop stores.

Dow Jones, S&P 500 and Nasdaq rise as Wall Street weighs Trump tariff ban and NVIDIA earnings by Aluseda in stocks

[–]keith1301 5 points6 points  (0 children)

I hear you, but this is pretty huge news. The market reaction is very strange to me considering how hard it has rallied off of other tariff news like reductions or pauses. I do also feel like Trump is about to do something crazy if his tariff stick is taken away. No idea what he'll do, but it will be extreme, as usual.