Beer is defensive

Good Morning Voornaam,

Whether you own a business or you enjoy investing on the market, an understanding of company valuations is never a bad thing. In a bizval webinar next week Tuesday, I'll be explaining the methodology we use in bizval to value companies. There will also be a panel discussion with bizval CEO Graham Stephen and special guests from Syft Analytics. Get your burning questions ready and register to attend here>>>

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More great stuff to learn from

There's really no shortage of learning opportunities in Ghost Mail this morning. Here are a few others:

Raising a glass to a defensive business

British American Tobacco is always spoken of as a defensive business. Though I understand the reasons, I am still skeptical of the underlying story. Almost all of my friends will happily have a beer. None of them smoke.

This brings me neatly to AB InBev, with a share p rice performance over the past 12 months of +31.6% vs. -1.7% at British American Tobacco. The latest quarterly numbers reflect volume growth despite a major jump in pricing. Apparently, we aren't very price sensitive to our favourite beer.

Another cheat is fast food, though Eskom is doing wonderful things for getting us out the house and in the queue at our local burger joint. Famous Brands reckons that load shedding isn't doing good things for their growth story, but I wholeheartedly disagree with that view. The latest numbers suggest that I may be onto something, though there are still some COVID overhangs in the base period.

I must also highlight numbers from Pick n Pay that were largely blamed on Eskom for being so poor. Bluntly, I think Pick n Pay has more introspection to do than that. Shoprite is absolutely killing it at the moment. Although I'm always hesit ant in extrapolating the views of my peer group and friends onto a large market size, the reality is that Shoprite is seen in a far more positive light than Pick n Pay by just about everyone I speak to. The numbers seem to reflect this and comparing the recent share price charts gives an extraordinary outcome.

In addition to these updates, there's a production update from Gold Fields, earnings results from KAL Group and a quarterly update from Mondi. Find it all in Ghost Bites>>>

The ECB follows the Fed

The ECB hiked by 25 basis points yesterday, commenting that they are not yet close to pausing interest rate hikes. Gold continued to rally during the day, with the yellow metal testing $2,070. TreasuryONE also highlights that global recession fears and tightening monetary policies have seen other commodities like oil drop further.

The rand is finding it tough to show any signs of a recovery back to R18.00 and below. Most emerging markets currencies have traded sideways, except for Brazil which came under pressure after leaving interest rates unchanged overnight. Looking ahead, non-farm payrolls data today will be watched closely, with unemployment expected to rise to 3.6%.

I'm off to Knysna today for the Simola Hillclimb, my absolute favourite local motorsport event. If I'm slightly late in your inboxes on Monday, you know why.

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