Cramer’s Pure Play on Liquor

Monday, 10 Oct 2011 | 6:38 PM ET
Is BEAM's Stock Top Shelf?
BEAM has profited from the break-up of Fortune Brands says Mad Money's Jim Cramer, and now that it is a stand-alone liquor business, the company has a lot of growth ahead, and it's too darned good to ignore.

Now that Fortune Brands has been broken up and is a stand-alone liquor business called Beam, it has landed squarely on Cramer’s buy list.

“Beam has always had a terrific liquor business,” he said, “and now that it's a pure play without all those unrelated divisions cluttering things up, I think the stock is looking more attractive to me.”

But most important to the “Mad Money” host is the fact that it is now the one liquor company that can be easily bought. In fact, he thinks it’s a natural takeover target for Diageo.

What’s more, the booze business works well in good times and bad, and Beam’s brands, including Jim Beam and Maker’s Mark, are typically cheaper than the competition.

The company has a healthy balance sheet, a “not-too-bad” dividend and has seen volumes up 11.9 percent in August—much higher than the 4.7 increase for the entire industry.

“The company’s got a lot of growth ahead it,” Cramer said. “Frankly, it's too darned good to ignore.”

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