ABEV review

http://www.mzweb.com.br/ambev2012/web/default_en.asp?idioma=1&conta=44

One of the largest brewer in the world exposed to latin america economy growth.
Demand underpinned by growing wealth in Latin america.
balancesheet is good and not overstretch. Consistent cash flow generation.
Net cash position. 5B Reals debt vs 14B Reals cash. Current debt - 2.5B and long term debt of 2.3B.
Interest coverage is 6x on operating profit basis. Adequate. Expense can be covered by cash balance if there is shortfall. Based on cash flow statement, interest payment is 200M vs interest recieved of 250M for 1H 2019 which means company has net finance cash inflow.
Interest expense includes interest paid to banks and gains/losses on derivative/non derivative instrument which is non cash.

Debt is growing slightly from previous year though still in net cash position
Pay dividends twice a year but for 2019, there is no interim dividend. Not sure if they change to once per year instead of twice per year. This is one unknown to be confirmed.

http://www.mzweb.com.br/ambev2012/web/conteudo_en.asp?idioma=1&conta=44&tipo=43241#3

Based on their dividend policy, it is mandatory to pay out min. 40% of income as dividends.
high margin business with 38% EBITA margin ans 20% profit margin.

Anheuser-Busch InBev ons 62% of shares while market owns 28% of shares. There are some liqudity. Free Float in NYSE is 85 vs in Brazil.

Stable business exposed to growth markets. Stable dividend policy. Share price depressed for various geopolitical reasons but underlying business is still OK. Balance sheet  is sound and not stretch.

Buy when price drop further.