Molson Coors Brewing Company (NYSE:TAP)

CAPS Rating: 4 out of 5

The Company principally is a holding Company. Its operating subsidiaries are Coors Brewing Company, Coors Brewers Limited, Molson Canada and other corporate entities.

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Player Avatar kdoguci (77.00) Submitted: 7/3/2007 11:48:53 AM : Underperform Start Price: $38.76 TAP Score: -53.72

"The gains are in part a result of rising costs for malting barley, one of the main ingredients in beer. But a variety of other costs are increasing for brewers, including for other grains, glass, cardboard, energy, transportation, insurance and labor." USAToday

Member Avatar PeyDaFool (79.19) Submitted: 7/13/2010 6:50:05 PM
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USAToday? You might as well be pulling your sources from the National Enquirer. All those pie charts and colorful pictures are, no doubt, entertaining, but when it comes to real news, let's switch to a "big boy" paper, such as the Wall Street Journal, shall we?

As a home brewer and a conscious consumer, take my word for it that there's always a better deal out there. If the company you're purchasing your malted barley from isn't providing the right price, you take your business elsewhere. Better yet, you buy their business outright and cut costs even more. A company this size wouldn't think twice about this sort of venture.

The bottom line is Molson Coors makes a product that has very few ingredients in it and limited quantities of grain, hops yeast, as well. Their management is well equipped to take care of situations like these, such as increasing costs of ingredients, rather than lie down and accept defeat. Rising costs are a part of every business (name a business without the need for glass, energy, cardboard or insurance).

Moreover, If you're arguing TAP will underperform SPY because of simple rising costs, I would point out this argument is not very sound, since these costs will affect nearly every company in the 500 index.

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