Topic: Growth Stocks

Wall Street Stock Forecaster Hotline Hotline – Friday, June 1, 2012

Article Excerpt

DIAGEO PLC ADRs, $93.40, New York symbol DEO, is the world’s largest premium alcoholic beverage company. Its major brands include Guinness stout, Smirnoff vodka, Johnnie Walker scotch whisky, Captain Morgan rum and Bailey’s Irish Cream. This week, Diageo agreed to buy the rights to Ypioca, a popular brand of cachaca in Brazil. Cachaca is a liquor that is made from sugar-cane juice. Diageo is paying roughly 300 million British pounds for this business (1 British pound = $1.60 Canadian). To put that in context, the company earned 953 million pounds, or 1.53 pounds per ADR, in the six months ended December 31, 2011. (Each American Depositary Receipt represents four Diageo common shares.) The purchase will help Diageo profit from rising demand for premium spirits in Brazil. It will also help the company achieve its goal of getting half of its sales from emerging markets by 2015, up from the current 40%. That will help it offset slower growth in North America and Europe. Diageo…