SIF Folio: Drinks group Stock Spirits could have recovery potential
This year’s lockdown restrictions have inevitably led to a big shift in alcohol sales from the on trade to the off trade. One company that may have benefited from this is drinks group Stock Spirits.
This £440m group generates over 80% of its sales in the Czech and Polish markets, where its brands are #1 and #2 respectively by market share. Historically, just 15% of Stock’s group revenue came from the on-trade. In May, the company said that trading has seen “minimal impact from the COVID-19 pandemic” to date. However, the near-term outlook remains uncertain, as I’ll explain.
Stock Spirits currently comes very close to qualifying for my Stock in Focus (SIF) screen, only failing due to some broker uncertainty about whether the full-year dividend will be maintained.
The shares also score highly with Stockopedia’s algorithms, with a StockRank of 98. At the time of writing, Stock is also one the top five stocks by rank in the Consumer Defensives sector. That’s no mean feat given the proven quality of some shares in this sector.
This week I’m going to take a closer look at Stock Spirits, with a view to adding this mid-cap to my rules-based SIF Folio.Stock Spirits...