Market Got You Down - Drink Up! - Molson Coors

Need examples of disaster to feed your paranoia about a market in free-fall ? Well, how about American Home Mortgage filing for bankruptcy protection. How about Bear Stearns president stepping down as a result of hedge fund catastrophe? Or, how about oil prices plunging on concerns about the economy's health. To quote Globe columnist Brian Milner, "the latest troubling U.S. economic signals, spreading housing woes, the worsening credit squeeze and more turmoil in the markets ...[has been] enough to spur talk of the dreaded 'R' word". NO!!!. Not the R word!

Well, just when the bull was looking tired, stocks rallied sharply Monday [August 6 2007] on hopes that the Federal Reserve will move to a more neutral stance at Tuesday's policy meeting. So far, today looks good. One thing is for sure - the stock market does not lie. Opinions are worthless – in the end, it’s all about the facts, jack – nothing but the facts.

My approach to investing is conservative in the best of times, and these days even more so. In these tumultuous times, I like to stick with the facts as much as possible. I’ve spoken about energy in previous posts (Petro-Canada, Cameco, Canadian Hydro,
GE, and Boralex) and I like the energy sector because despite fears of a commodity down-turn, global warming is a political force that bodes well for alternative energy plays and peak oil is making it ever more expensive to extract fossil fuels, this coupled with huge demand, is making oil an expensive commodity. I’ve spoken about healthcare, specifically CML HealthCare. Whether the economy is hot or not, people are still going to get sick and the baby boomers are just starting to retire. But I will leave those areas for my past posts and future ones. Today, I will discuss another area I like (both as a sector and a substance), and that is alcohol. As stated so eloquently in Chris Krasowski’s blog post, "when times are good and when times are bad, it's a fact of life that people will drink either way". I'll drink to that. Cheers!

A company I like and which reported today is Molson Coors (NYSE:TAP). Take a look at their chart on Google Finance. What a spike! It hit over $96 from an opening of around $92 today, (August 7th) but at the time of this writing, has settled back down to around $92.

Molson Coors posted higher-than-expected quarterly profits, helped by increased beer shipments to North American wholesalers and a lower tax rate.

I see good things for this stock. First of all, the merger between Molson Inc. and Adolph Coors Co. has been very successful, despite some analysts' fears that it would not work - they have proved them wrong. In North America, their performance has been great and this is key to their ongoing success, in my opinion. Molson Coors is competing fiercely in the low-priced beer segment, which in the past has eroded the traditional brands’ market share (make’er a laker!). The majors have hit back, no longer ignoring the "buck a beer" brands that got very successful under their complacent noses . Not any longer - they are competing hard in value and getting the sales.

I like beer, and I like Molson Coors. I think it is a safe bet.

DISCLOSURE: I do not own shares of Molson Coors yet. . .