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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (19978)	10/29/2004 6:20:45 AM
From: Dave	Read Replies (1) \| Respond to of 78661

Debt levels aren't so bad. Basically, by borrowing to repurchase share, Bud is essentially "shifting" capital from one bucket to another. This type of strategy typically enables the company to lower its WACC thereby allowing the company to create more "economic value" each period. I wouldn't be concerned with debt levels. I reckon that Bud is in a fairly "stable" business and, in some way, perhaps even counter cyclical, i.e. when the economy sucks, people drink more. They earn about 10x their interest expense which provides additional borrowing capacity.