UMG is another stock in the sector that’s trading below its listing price, in August the company delivered a major downgrade of over 22% on top-end EBITDA which took the stock below $3 for the 1st time and it’s basically still there. The company has struggled with poor quality / high-cost North American barley which is flowing down into higher production costs and falling margins, while the company is optimistic about an improvement in H2 we want to see some performance before considering the stock as a viable investment.
- We aren’t keen on UMG which has shown it cannot control its own destiny while the company’s shares aren’t cheap enough to offset these clear risks to profitability i.e. it’s simply too hard.
MM is neutral UMG
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