Group 1 - The investment approach focuses on long-only strategies, evaluating companies from an operational and buy-and-hold perspective rather than market-driven dynamics [1] - The emphasis is on understanding the long-term earnings potential of companies and the competitive dynamics within their industries [1] - Most recommendations will be holds, indicating that only a small fraction of companies are considered buy opportunities at any given time [1] Group 2 - Hold articles are intended to provide valuable information for future investors and introduce a healthy skepticism in a generally bullish market [1]

Financial Performance - Net sales decreased by 11.8% to CLP 853,413 million in 4Q25, with a year-to-date (YTD) total of CLP 2,909,625 million, reflecting a 0.2% increase compared to YTD24[6] - Gross profit fell by 15.2% to CLP 392,642 million in 4Q25, with YTD gross profit at CLP 1,291,591 million, down 1.7% from YTD24[6] - EBITDA reached CLP 151,201 million in 4Q25, a 17.2% decrease, with YTD EBITDA totaling CLP 376,208 million, down 9.6%[6] - Net income contracted by 25.7% to CLP 55,096 million in 4Q25, with YTD net income at CLP 117,152 million, down 27.2%[6] - Net sales decreased by 11.8%, driven by a 12.4% drop in average prices in CLP, while volumes increased by 0.6%[17] - Gross profit reached CLP 392,642 million, a 15.2% decrease, with gross margin declining by 183 bps[17] - EBITDA totaled CLP 151,201 million, a 17.2% decrease year-over-year, with the Chile segment growing by 6.0% but offset by a 44.5% decrease in the International Business segment[17] - Net income was CLP 55,096 million, down from CLP 74,153 million the previous year, reflecting the overall performance challenges[17] - Total net sales for Q4 2025 reached CLP 853,413 million, a decrease of 11.8% compared to Q4 2024's CLP 968,078 million[47] - Gross profit for Q4 2025 was CLP 392,642 million, down 15.2% from CLP 463,084 million in Q4 2024, resulting in a gross margin of 46.0%[47] - EBIT for Q4 2025 decreased by 20.2% to CLP 109,913 million, with an EBIT margin of 12.9% compared to 14.2% in Q4 2024[45] - Net income attributable to equity holders for Q4 2025 was CLP 55,096 million, a decline of 25.7% from CLP 74,153 million in Q4 2024[45] - EBITDA for Q4 2025 was CLP 151,201 million, down 17.2% from CLP 182,621 million in Q4 2024, with an EBITDA margin of 17.7%[45] - For the twelve months ended December 31, 2025, net sales were CLP 2,909,625 million, a slight increase of 0.2% from CLP 2,904,566 million in 2024[46] - Gross profit for the twelve months ended December 31, 2025 was CLP 1,291,591 million, down 1.7% from CLP 1,313,609 million, resulting in a gross margin of 44.4%[46] - EBIT for the twelve months ended December 31, 2025 decreased by 15.9% to CLP 220,849 million, with an EBIT margin of 7.6%[46] - Net income attributable to equity holders for the twelve months ended December 31, 2025 was CLP 117,152 million, a decrease of 27.2% from CLP 160,944 million in 2024[46] Segment Performance - The Chile Operating segment's EBITDA grew by 7.8%, while the International Business and Wine segments saw contractions of 29.5% and 14.9%, respectively[10] - In Colombia, volumes reached 2.4 million hectoliters in 2025, marking a 6.1% increase, indicating robust brand portfolio development[14] - The Chile Operating segment saw a 5.5% increase in top line, driven by a 4.1% rise in volumes and a 1.3% increase in average prices[22] - The International Business Operating segment experienced a 36.3% decrease in net sales, primarily due to lower average prices and a 4.6% contraction in volumes[25] - The Wine Operating segment reported a 16.8% decline in net sales, with a 9.7% drop in volumes and a 7.9% decrease in average prices[26] Strategic Initiatives - The company integrated PepsiCo's beverage portfolio in Paraguay, contributing to regional growth and volume increases in the water business in Argentina[11] - CCU's strategic plan for 2025-2027 focuses on profitability, growth, and sustainability, with an emphasis on revenue management and high-margin innovations[11] - The company aims to continue developing its strategic pillars while navigating challenges in the macroeconomic environment, particularly in Argentina and the wine business[15] - The company launched new products in the flavored low alcohol ready-to-drink category and expanded its partnership with Nestlé for coffee drinks[24] Cost Management - MSD&A expenses decreased by 13.0% in CLP, improving as a percentage of net sales by 46 bps due to efficiencies across all segments[17] - Direct costs for Q4 2025 were CLP 368,591 million, a decrease of 7.8% from CLP 399,752 million in Q4 2024[47] - MSD&A expenses increased by 10.1% to CLP 285,497 million compared to CLP 328,318 million in Q4 2024[47] Cash Flow and Financial Position - Cash and cash equivalents at the end of 2025 were CLP 519,176 million, down from CLP 707,123 million at the end of 2024[50] - Total assets decreased to CLP 3,645,387 million in 2025 from CLP 3,989,717 million in 2024[50] - Total financial debt decreased to CLP 1,281,541 million in 2025 from CLP 1,439,668 million in 2024[51] - Net financial debt to EBITDA ratio increased to 2.03x in 2025 from 1.76x in 2024[51] - The liquidity ratio decreased to 1.90 in 2025 from 2.06 in 2024[51] - The company reported a net cash outflow from investing activities of CLP 164,300 million in 2025, compared to CLP 118,294 million in 2024[53]

Core Viewpoint - The article emphasizes the importance of investing in safe-haven assets and undervalued dividend-paying consumer staples stocks during periods of market volatility and geopolitical tension [1][2]. Group 1: Investment Strategy - Safe-haven assets like gold, silver, and U.S. Treasuries are recommended for hedging risks, although their effectiveness may vary [1]. - Consumer staples and utilities are considered safe investments due to their inelastic demand and established history of returning capital to shareholders [2]. Group 2: Selected Companies - **United Breweries Co. (CCU)**: - Benzinga Edge Value Score of 98.14, with a current dividend yield of 2.8% and a dividend payout ratio (DPR) of 58.9% [4]. - The stock trades at 16 times earnings and 0.85 times sales, showing positive price action [4]. - CCU shares have increased over 11% recently, with bullish indicators such as a Golden Cross and favorable MACD signals [7]. - **NuSkin Enterprises Inc. (NUS)**: - Benzinga Edge Value Score of 86.96, with a market cap of $540 million and a dividend yield of 2.08% [8]. - The company reduced its dividend payout from $0.39 to $0.06, but the current payout allows for future increases [8]. - NUS shares have risen 15% at the start of the year, indicating bullish momentum [11]. - **Cresud SACIF y A (CRESY)**: - Benzinga Edge Value Score of 93.82, with a dividend yield of over 5% and a DPR of 23.4% [12]. - The company operates in agriculture and real estate, providing diversification during geopolitical tensions [12]. - CRESY shares have formed a Golden Cross, with the 50-day SMA acting as support [15]. - **Weis Markets Inc. (WMK)**: - Benzinga Edge Value Score of 89.87, with a market cap of $1.68 billion and a dividend yield of 2% [16]. - The DPR is 35.79%, allowing potential for future dividend increases [16]. - WMK shares have shown bullish signals, with a breakout above the 50-day SMA and an RSI indicating upward momentum [18]. - **Calavo Growers Inc. (CVGW)**: - Benzinga Edge Value Score of 80.91, with a dividend yield of 3.09% and a DPR of 72% [19]. - The company operates in the fresh produce sector, which is less affected by tariffs [19]. - CVGW shares have surged nearly 20% recently, breaking above key moving averages [21].

Core Viewpoint - The focus is on long-only investment strategies that evaluate companies from an operational and buy-and-hold perspective, emphasizing long-term earnings power and competitive dynamics rather than market-driven price actions [1]. Group 1: Investment Philosophy - The investment approach prioritizes operational aspects and the long-term potential of companies, suggesting that most recommendations will be holds, reflecting a cautious stance in a bullish market [1]. - The company believes that only a small fraction of companies should be considered for purchase at any given time, indicating a selective investment strategy [1]. Group 2: Communication and Disclosure - The articles are presented on an "as is" basis without warranty, representing the author's opinions and not constituting professional investment advice [1]. - There is a clear disclosure that the author has no current stock or derivative positions in the companies mentioned, nor plans to initiate any within the next 72 hours [2].

Financial Performance - In Q3 2025, consolidated volumes increased by 1.2% to 8,086 ThHL, while year-to-date volumes rose by 10.5% to 25,365 ThHL[5]. - Net sales decreased by 1.1% to CLP 658,628 million in Q3 2025, with a year-to-date increase of 6.2% to CLP 2,056,212 million[5]. - Gross profit fell by 2.9% to CLP 279,936 million, with a year-to-date gross profit of CLP 898,949 million, reflecting a 5.7% increase[5]. - Net income contracted by 47.6% to CLP 15,496 million, with earnings per share dropping to CLP 41.9[5][10]. - Net sales decreased by 1.1%, driven by a 2.2% decline in average prices in CLP, while volumes increased by 1.2%[19]. - Gross profit reached CLP 279,936 million, a decrease of 2.9%, with gross margin declining by 79 basis points[19]. - EBITDA increased by 4.6% to CLP 73,635 million, with a consolidated EBITDA margin expanding from 10.6% to 11.2%[19]. - EBIT grew by 8.2% to CLP 36,392 million, reflecting improved operational efficiency[19]. - Net income was CLP 15,496 million, down from CLP 29,548 million year-over-year[19]. - Net sales for Q3 2025 were CLP 658,628 million, a decrease of 1.1% compared to Q3 2024[47]. - Gross profit for Q3 2025 was CLP 279,936 million, down 2.9% year-over-year, with a gross margin of 42.5%[47]. - EBITDA for Q3 2025 increased by 4.6% to CLP 73,635 million, resulting in an EBITDA margin of 11.2%[47]. - Net income attributable to equity holders for Q3 2025 was CLP 15,496 million, a decline of 47.6% from Q3 2024[47]. - For the nine months ended September 30, 2025, net sales rose by 6.2% to CLP 2,056,212 million compared to the same period in 2024[48]. - EBIT for the nine months ended September 30, 2025, was CLP 110,936 million, down 11.2% year-over-year, with an EBIT margin of 5.4%[48]. Segment Performance - The International Business segment saw a volume increase of 5.3%, but net sales contracted by 8.9% due to a 13.5% decline in average prices[12]. - The Wine segment experienced a 1.6% increase in top line, driven by a 4.8% rise in average prices, despite a 3.0% decline in volumes[13]. - The Chile operating segment reported a 1.8% increase in top line, supported by a 2.4% rise in average prices, despite a 0.6% decline in volumes[11]. - The International Business Operating segment saw a volume increase of 5.3%, but net sales contracted by 8.9% due to a 13.5% drop in average prices in CLP[28]. - The Wine Operating segment reported a 1.6% increase in top line, driven by a 4.8% rise in average prices, while volumes decreased by 3.0%[29]. Strategic Focus - The company is focused on its 2025-2027 Strategic Plan, emphasizing profitability through revenue management and operational efficiencies[16]. - The company continues to build a robust brand portfolio in Colombia, achieving low-double digit volume growth[14]. - The company launched new products, including Rockstar Sandía Punch and Gatorade Limón, to align with market trends[27]. Financial Position and Cash Flow - The company reported a total financial debt of CLP 1,296,584 million, down from CLP 1,439,668 million in December 2024[54]. - Net financial debt to EBITDA ratio increased to 1.96x from 1.76x in the previous year, indicating a rise in leverage[54]. - The company’s total assets decreased to CLP 3,597,681 million from CLP 3,989,717 million in December 2024[54]. - The company’s liquidity ratio remained stable at 2.06, indicating strong short-term financial health[54]. - Cash and cash equivalents at the end of Q3 2025 decreased to CLP 498,785 million from CLP 599,279 million in Q3 2024, representing a decline of 16.7%[56]. - Net cash inflows from operating activities for YTD September 2025 were CLP 113,244 million, down 15.1% from CLP 133,354 million in 2024[56]. - The net cash outflow from investing activities for YTD September 2025 was CLP 115,999 million, significantly higher than CLP 78,008 million in 2024, indicating increased investment activity[56]. - The net cash outflow from financing activities for YTD September 2025 was CLP 173,744 million, compared to CLP 67,176 million in 2024, reflecting a substantial increase in financing costs[56]. - The effects of exchange rate changes on cash and cash equivalents resulted in a negative impact of CLP 31,840 million for YTD September 2025, compared to a negative CLP 7,045 million in 2024[56]. - The consolidated EBITDA excluding the impact of IAS 29 for Q3 2025 was CLP 74,088 million, compared to CLP 70,453 million in Q3 2024, showing a growth of 5.1%[56]. - The cash and cash equivalents at the beginning of the year for 2025 were CLP 707,123 million, up from CLP 618,154 million in 2024, indicating a stronger starting position[56].

Industry Overview - The Zacks Beverages – Alcohol industry is facing significant pressure due to inflation affecting labor, transportation, and raw materials, leading to rising ingredient prices and increased shipping and packaging costs, which are squeezing margins and profitability [1][5][6] - Newly imposed tariffs, including a 25% tariff on imports from Canada and Mexico and a 10% tariff on goods from China, are expected to disrupt the U.S. beverage alcohol market, raising prices for imported brands and dampening consumer demand [7] Growth Opportunities - Despite challenges, the industry is experiencing growth through premiumization, with consumers increasingly seeking higher-quality offerings such as ready-to-drink (RTD) spirits, canned wines, and flavored malt beverages [2][8][9] - Leading companies are focusing on innovation and strategic investments to capture market momentum, with a strong emphasis on product development and premium positioning [3] Company Strategies - Diageo Plc is focusing on innovation and consumer moderation, with a strong emphasis on non-alcoholic spirits and a $2 billion productivity program aimed at driving efficiency while ensuring sustainable growth [21][22] - The Boston Beer Company is committed to revitalizing its brands and expanding its Beyond Beer segment, which is expected to continue outpacing the traditional beer market [25][26] - Compania Cervecerias Unidas is recognized for its diverse portfolio and strong market presence in multiple countries, with a focus on maintaining a robust balance sheet and market-leading brands [29][30] Market Performance - The Zacks Beverages – Alcohol industry has underperformed the broader sector and the S&P 500, with a collective decline of 16.2% over the past year compared to a 5.7% dip in the Zacks Consumer Staples sector and a 17.7% rally in the S&P 500 [13] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 14.58X, significantly lower than the S&P 500's 22.59X and the sector's 17.12X [16]

Group 1 - Compañía Cervecerías Unidas (CCU) reported its 2Q25 results, indicating some signs of economic improvement in Chile and Argentina [1] - The company experienced a non-profitable quarter due to seasonality, which is a recurring factor in its financial performance [1]

Financial Performance - Net sales for the six-month period ended June 30, 2025, reached ThCh$ 1,397,584,492, a 10% increase from ThCh$ 1,270,665,463 in 2024[13] - Gross margin improved to ThCh$ 619,013,030 for the six-month period, compared to ThCh$ 562,240,017 in the previous year, reflecting a 10% increase[13] - Net income for the six-month period was ThCh$ 50,275,434, down 19% from ThCh$ 61,858,215 in 2024[16] - Basic earnings per share from continuing operations decreased to 126.01 Chilean pesos, down from 154.92 Chilean pesos in 2024, representing a decline of 18%[13] - Other comprehensive income showed a loss of ThCh$ 17,568,093 for the six-month period, contrasting with a gain of ThCh$ 173,863,000 in 2024[16] - Comprehensive income attributable to equity holders of the parent was ThCh$ 36,409,797, down from ThCh$ 226,899,306 in the previous year, indicating a significant decline[16] - Income before taxes for the six-month period was ThCh$ 17,602,026, a decrease of 64% compared to ThCh$ 48,578,674 in 2024[13] Assets and Liabilities - Total assets decreased from ThCh$3,989,716,990 as of December 31, 2024, to ThCh$3,512,954,979 as of June 30, 2025, representing a decline of approximately 11.9%[8] - Current liabilities reduced from ThCh$860,006,211 to ThCh$645,487,795, a decrease of about 25%[10] - Total equity attributable to equity holders of the parent decreased from ThCh$1,525,183,185 to ThCh$1,476,796,450, reflecting a decline of approximately 3.2%[10] - Cash and cash equivalents decreased from ThCh$707,122,815 to ThCh$511,260,232, a reduction of about 27.7%[8] - Total current assets decreased from ThCh$1,771,266,840 to ThCh$1,384,158,165, a decline of approximately 21.9%[8] - Total liabilities decreased from ThCh$2,317,201,680 to ThCh$1,902,592,320, a reduction of about 17.9%[10] - Non-current liabilities decreased from ThCh$1,457,195,469 to ThCh$1,257,104,525, a reduction of approximately 13.7%[10] Operational Costs - Distribution costs increased to ThCh$ 270,169,675, up from ThCh$ 247,689,360 in 2024, indicating a rise of 9%[13] - Administrative expenses rose to ThCh$ 107,139,653, compared to ThCh$ 84,770,584 in 2024, marking a 26% increase[13] Cash Flow and Investments - The net cash inflows from operating activities for the first half of 2025 were ThCh$98,169,005, compared to ThCh$86,683,789 in 2024, indicating an increase of about 13.5%[24] - The company reported a net cash outflow from investing activities of ThCh$65,479,723 for the first half of 2025, compared to a net outflow of ThCh$45,273,619 in 2024, indicating an increase in investment activity[24] - Cash and cash equivalents at the end of the period were ThCh$511,260,232, down from ThCh$636,538,816 at the end of June 2024, showing a decrease of approximately 19.7%[24] Employee and Dividend Information - The company paid dividends totaling ThCh$48,172,529 in the first half of 2025, compared to ThCh$41,753,925 in the same period of 2024, representing an increase of about 15.5%[24] - Payments of salaries increased to ThCh$223,558,430 in 2025 from ThCh$198,375,392 in 2024, reflecting a rise of approximately 12.7%[24] - As of June 30, 2025, the company employed a total of 9,470 employees, with 437 in the parent company and 9,470 consolidated[28] Market Presence and Brand Portfolio - Compañía Cervecerías Unidas S.A. operates in multiple countries including Chile, Argentina, Uruguay, Paraguay, Colombia, and Bolivia, and is the largest brewer in Chile and the second largest in Argentina[26] - The company has a diverse portfolio of brands, including its own CCU brands and international licensing brands such as Heineken and Sol, across various beverage categories[35][36] - CCU has expanded its wine portfolio through its subsidiary VSPT, which includes brands like Altaïr and GatoNegro, produced across eight wineries[41] - The company has a significant presence in the cider market in Argentina, marketing leading brands such as "Sidra Real" and "La Victoria"[39] Licensing and Joint Ventures - The company holds licenses for major brands including Aberlour, Absolut, and Chivas Regal, with validity extending to June 2027 for many[46] - The company has a joint venture in Colombia for the production and distribution of Heineken beer, and has incorporated local brands like Andina and Tres Cordilleras[45] - The company has established a partnership with the Vierci Group in Paraguay to market and distribute Pepsico beverages and snacks, enhancing its product offerings[43] Financial Reporting and Accounting Policies - The company’s financial statements are presented in thousands of Chilean pesos, ensuring clarity in financial reporting[31] - The Company uses the Chilean peso (Ch$ or CLP) as its functional currency, while subsidiaries in the U.S., Argentina, Uruguay, Paraguay, Bolivia, the UK, and China use their respective currencies[103] - The application of IAS 21 amendments resulted in a negative equity impact of ThCh$ 59,151,843 due to currency translation adjustments[89] - The Company assesses impairment of accounts receivable collectively based on similar risk characteristics, recognizing losses in the Interim Consolidated Statement of Income as Administrative expenses[144] Investments and Acquisitions - The company acquired 51% of Bebidas del Paraguay S.A. and Distribuidora del Paraguay S.A. for USD 32,652,006 (equivalent to ThCh$ 31,549,348) on February 20, 2024[56] - The acquired business contributed revenues of ThCh$ 9,270,041 and net income of ThCh$ 108,368 for the period from October 14, 2024, to December 31, 2024[59] - CCU Inversiones S.A. increased its stake in Viña San Pedro Tarapacá S.A. to 85.1697% for ThCh$ 711,155, positively impacting equity by ThCh$ 681,186[72]

Core Viewpoint - Cervecerias Unidas (CCU) is experiencing significant selling pressure, with an 8.8% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by analysts predicting better-than-expected earnings [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2]. - CCU's current RSI reading is 26.52, suggesting that the heavy selling may be exhausting itself, indicating a possible bounce back towards equilibrium in supply and demand [5]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts that earnings estimates for CCU have increased by 12.9% over the last 30 days, which often correlates with price appreciation in the near term [7]. - CCU holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further indicating a potential turnaround [8].

Core Insights - The article discusses the author's long-term investment in Compañía Cervecerías Unidas (CCU) and previous coverage of the company in 2022, indicating a positive outlook on the stock [1][3]. Group 1 - The author has been a shareholder of CCU for an extended period, suggesting confidence in the company's performance [1]. - The article highlights the author's experience as a former hedge fund analyst and extensive research in Latin American markets, particularly in Mexico, Colombia, and Chile, which adds credibility to the analysis of CCU [2]. - The author specializes in identifying high-quality compounders and growth stocks at reasonable prices, indicating a strategic investment approach that may apply to CCU [2].