Paperstand (BUD, MGM, THO)

The WSJ’s “Heard on the Street“ column discusses Anheuser-Busch (BUD), which holds 48% share of the US beer mkt. The new SABMiller-MolsonCoors competitor will have a 30% share. This latest attack isn't likely to seriously dent BUD's performance in the US. It also may prompt the co's mgmt to take some intl action, possibly a merger that would give the co greater entry to S-America, E-Europe and India. CEO August Busch IV wrote in a memo to wholesalers and employees that "we must not lose sight of the fact that this joint venture represents an attempt by those co’s to better compete against us." For starters, the SAB-Molson Coors deal was done out of weakness and is all about cost cutting, which highlight's Anheuser's strengths. The 2 co’s expect to see savings of about $500m annually thanks to lower costs for transportation and marketing. But that is an acknowledgment they weren't able to match Anheuser's operational efficiency and had failed to win significant mkt share on their own. The US operations of both SABMiller and Molson, for example, generate operating margins of less than 10%. Anheuser's US operations, by contrast, run on operating margins of about 23%. Anheuser "executes pretty well, they do a good job of blocking and tackling," said Greg Estes, of Intrepid Capital Funds. That isn't about to change b/c a new rival emerges, he added. In addition, Anheuser's "history of stable cash flows" should more than counter recent weakness of the US beer mkt. "In spite of what analysts and others talk about, their declines are too fast and furious for reality," Mr. Estes said. He said Anheuser's stock is fairly valued at current levels, but if the mkt continued to sell it off "sharply" on the SAB-Molson Coors news, "I'd probably add to it."

According to the WSJ MGM Mirage (MGM) plans to announce today a roughly $5bn project for a new resort in Atlantic City. The project, called MGM Grand Atlantic City, is planned to complete in 2012.

Barron’s Online “Inside Scoop” section reports that Walter Bennett, the CFO for Thor Industries (THOR) bought $456K in Thor shares on Fri. The buy represents the first insider purchase at Thor in almost 4ys.