Bull’s Eye Report: Beam Inc. (BEAM)

BEAM's support has been tested three times without breaking down

   

At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.

In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.

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Company Symbol Industry Stock Rating YTD% Gain S.T.
Stop Loss
Beam Inc. BEAM Distillers & Vintners 8.4 -1.66% $59.70

Why We Like The Stock:

Beam Inc. (NYSE:BEAM) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) with a positive technical set-up. BEAM hit a rough patch in the second half of 2012, but since late November, the stock has been trending higher into the new year. The stock has some pretty good support right below $60, which has been tested and has held on three occasions since late December. BEAM has a low correlation to the market (as compared to indicators like S&P 500 ETF Trust (NYSE:SPY), S&P MidCap 400 ETF (NYSE:MDY) and the iShares Russell 2000 Index ETF (NYSE:IWM), which is favorable in this overbought condition. We like the stock at current prices with an immediate upside to $63. While it’s not an extremely high-reward trade, the support around $60 makes it a safer play, which is recommended as this market is due for a pullback in the near future.

We Would Be Buyers:

At the current price (~$61.40), or on a pullback to $60.

Company Profile:

Beam Inc.is a premium spirits company that makes and sells branded distilled spirits products in major markets worldwide. Beam’s principal products include bourbon whiskey, Scotch whiskey, Canadian whiskey, tequila, cognac, rum, cordials, and ready-to-drink pre-mixed cocktails. The Company’s portfolio consists of brands, such as Power Brands, Rising Stars, Local Jewels and Value Creators. It has three geographic regions segments: North America, which includes United States, Canada and Mexico; Europe/Middle East/Africa (EMEA), which includes Spain, United Kingdom, Germany, Russia, Turkey, Ireland, Italy, Hungary, Czech Republic, Romania, South Africa, North America Duty Free and Europe Travel Retail, and Asia-Pacific/South America (APSA). In January 2012, it acquired Cooley Distillery. In March 2011, it acquired the Skinnygirl ready-to-drink cocktail business. In Jnue 2012, the Company acquired Pinnacle Vodka and Calico Jack rum brands from White Rock Distilleries.

Stock Rating: 8.4

The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.

Beam Inc. – Last Three Months

BEAM 1 300x168 Bulls Eye Report: Beam Inc. (BEAM)
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Beam Inc. – Last 12 Months

BEAM 2 300x168 Bulls Eye Report: Beam Inc. (BEAM)
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Beam Inc. – Last Five Years

BEAM 3 300x168 Bulls Eye Report: Beam Inc. (BEAM)
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At the time of publication the editor and affiliated companies own the following positions: None

Note: Positions may be bought or sold while this publication is in circulation without notice.


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