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Bear of the Day: Molson Coors (TAP)

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Extreme volatility makes the stock market a very scary place to navigate. Stocks whipping around like mad, huge spikes and precipitous drops everywhere you look. On a day like Tuesday, where everything is rallying off the lows, it may feel like you can get out there and buy anything. This can work out in the short-run, but in the long run can cost investors money. Picking up stocks on sale is smart, buy low and sell high. Sometimes those stocks that are running temporarily off the lows don’t have the goods to backup their moves. One way to make sure you find a stock that can talk the talk and walk the walk is by looking at its earnings trend. Stock with strong, positive earnings trends tend to do better across all markets.

Stocks with weaker or negative earnings trends fit into our Zacks Rank #5 (Strong Sell) category. One such stock is today’s Bear of the Day, Molson Coors (TAP - Free Report) . Molson Coors Brewing Company manufactures, markets, and sells beer and other malt beverage products in the United States, Canada, Europe, and internationally. The company sells various products under the Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite, Hamm's, Icehouse, Keystone, Mickey's, Miller64, Miller High Life, Milwaukee's Best, Olde English, Steel Reserve, Grolsch, Hop Valley, Leinenkugel's, Peroni Nastro Azurro, Pilsner Urquell, Revolver, Saint Archer, Sol, Terrapin, Crispin, Smith & Forge, Arnold Palmer Spiked, Henry's Hard, Redd's, and Steel Reserve Alloy Series brands.

The reason for the unfavorable rank lies in the series of earnings estimate revisions to the downside coming from analysts. In the last week alone, no fewer than seven analysts have cut their earnings estimates for the current year while next year’s estimates have been cut by six analysts. The bearish sentiment has dropped our Zacks Consensus Estimates for the current year from $4.63 to $4.39 while next year’s number has come down from $4.75 to $4.40.  

That negativity has put a damper on the stock’s price. After trading over $66 in late January of this year, shares have come down to $51.19 as of the close yesterday. Most of the time, TAP has been trading beneath its 200-day moving average. That moving average is also negatively sloped, helping to add to the bearish sentiment.

The Beverages – Alcohol Industry ranks in the Top 40% of our Zacks Industry Rank. Investors looking for other stocks within the same industry have a few names with positive Zacks Ranks to choose from. Among them are Zacks Rank #1 (Strong Buy) Boston Beer Company (SAM - Free Report) andZacks Rank #2 (Buy) Castle Brands .

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Molson Coors Beverage Company (TAP) - free report >>

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