Profits Brewing? Ball Supply Co
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Ask the Fool Strike That What’s a stock option’s Q“strike price”? — T.F., Richmond, Virginia The strike price is the price every year, you’re not likely to meet at which the option can be Fool’s School My Smartest Investment The Motley Fool Take A those expectations. But over long exercised. periods, if you invest meaningful Let’s say you work for Dodge- Volatility Is sums regularly, you can amass a Big and Still Profits Brewing? ball Supply Co. (ticker: WHAPP) hefty nest egg. Your portfolio won’t Anheuser-Busch InBev (NYSE: and receive 100 stock options Growing Normal necessarily average 10.9% growth BUD) has had a challenging year, with a strike price of $20 each. If you want to invest in the stock — it might grow by more or less — My smartest investment has as the global pandemic closed bars Later (and before the options been buying shares of Starbucks. market, you’ll need to expect vola- perhaps, say, 7% to 12%. and restaurants, exacerbating the expire), if Dodgeball Supply’s It wasn’t my favorite coffeehouse, tility and to be able to deal with it Note that the market’s volatil- change in consumer preferences for stock is trading at $45 per share, but if you can’t beat ’em, join ’em! alcoholic beverages toward hard appropriately. ity is often expressed in points, you may decide to “exercise” Now, as they open more and more seltzers. Yet it would be foolish for In 40 of the past 50 years, the not percentages. You’ll see, for your options. stores, I’ll benefit. — R.E., online investors to write off the world’s stock market, as measured by the example, a headline shrieking, Since your options carry a The Fool Responds: That’s a largest brewer with hundreds of S&P 500 index, gained in value. In “The Dow crashed 500 points strike price of $20, you’re can great way to look at it. It can be brands to its name. 18 of those years, it gained 20% or today,” which can sound alarming. buy up to 100 shares at $20 each satisfying to invest in solid and suc- The company had been working more — between 10% and 20% in But since the Dow Jones Indus- on reducing its massive debt load — not their going price of $45. cessful companies that you don’t 13 years, and between 0% and 10% trial Average was recently above love, especially increasingly domi- (largely from its 2016 acquisition To exercise them all, you’ll hand in nine years. The other 10 years 33,000, a 500-point drop would be nant ones, because the profits you’ll of SABMiller) before the pandemic over $2,000 for 100 shares worth featured losses; in three of those just a 1.5% decline. Percentages make as they grow can outweigh struck, but the COVID-19 outbreak $4,500. You can hang on to them years, the market lost more than give you a clearer picture. (Back your annoyance. Owning shares forced it to add more debt and sus- as long as you like, or quickly pend its dividend to preserve cash. It 20%. Clearly, stock investors need when the Dow was at 2,500, a means you’re an actual owner of cash out for a $2,500 profit. has been diligently paying down its to expect many ups and downs — 500-point drop would have repre- part of the company — albeit a very Of course, it’s a little more small part — and that can make you debt, though. And it’s pursuing the with more ups than downs. sented a much sharper fall of 20%.) complicated than that. There are root for the company to succeed. hard seltzer trend with various brands Here’s what that all amounts Most market corrections tend to tax issues to consider, for one Like most businesses, Starbucks in its portfolio, such as Bon & Viv. to over those 50 years: an aver- last just a few months, and rela- thing, and company stock options got whacked by the pandemic, but AB InBev’s beer business has age annual gain of 10.9%. That’s tively few last more than a year. struggled, but it has followed the do expire. Read your stock its recent earnings report revealed terrific, but it’s even more useful So expect drops in the market, and sales returning to positive territory premiumization trend in alcoholic option plan’s rules carefully, and (and realistic) to adjust that for the don’t panic. Instead, try to grab in China, while declines were cut in beverages. As one example, its consider seeking professional effects of inflation, which brings it some shares of great companies half in the core U.S. segment. (Sales Michelob Ultra accelerated its gains financial advice. Kaye A. down to an annual average infla- when they’re on sale. And keep in China grew 5% year over year, and remains the second-highest Thomas’ book “Consider Your selling beer (in dollars) in the U.S. tion-adjusted gain of 6.8%. If you’re any short-term savings — money compared to a 3% drop in the prior Options: Get the Most From Your after Bud Light. CEO Carlos Brito investing in stocks and expecting you may need in the next five or so quarter, and the U.S. segment’s drop Equity Compensation” (Fairmark shrank to 5% from 9%.) believes this year’s beer sales will to enjoy returns of 25% or more years — out of stocks. Press, $24) may also be helpful. With more people getting vac- “improve meaningfully” compared to cinated around the world, the global last year’s figures; ditto for earnings. *** end of social distancing may come The big brewer may be down How can a stock start Name That Company soon after the coffee giant celebrates at the moment, but it has a huge international presence and cost Q trading in the morning I trace my roots back to 1903, its 50th year as a company that at a higher price per share prides itself on being a gathering advantages from its great scale. The than the price at the close when my namesake bought a place. “We are here for that great global economy is likely to pick of trading the day before? — struggling curtain rod company human reconnection,” CEO Kevin up in the coming year or two as in Ogdensburg, New York. I grew Johnson has said. “Starbucks was parts of the world put the pandemic M.G., Chicago built for this moment.” behind them, and AB InBev’s future The price may have risen over time, in part via dozens It has more room for growth, too. looks promising. (The Motley Fool Aduring after-hours trading, of acquisitions. Today I’m based With nearly 33,000 locations today, has recommended Anheuser-Busch or demand for the shares may in Atlanta. With a market value it’s aiming for 55,000 by 2030. InBev NV.) have built up overnight — recently topping $11.5 billion, I’m a perhaps due to good news global consumer brand powerhouse, LAST WEEK’S TRIVIA ANSWER released, such as a very strong with some names you might know: I trace my roots back to 1993, when I was founded in St. Louis. quarterly earnings report. Rubbermaid, Paper Mate, Sharpie, Dymo, I went on to acquire cable systems across the nation, but was If buyers are willing to pay deep in debt — and trouble — by 2009. I spent much of that year in more for the shares, sellers will EXPO, Parker, Elmer’s, Coleman, Marmot, Chapter 11 bankruptcy protection but emerged stronger. Microsoft sell them for more. A stock’s Oster, Sunbeam, FoodSaver, Mr. Coffee, co-founder Paul Allen held a controlling stake in me for about a price reflects the last price at Rubbermaid Commercial Products, Graco, decade. Today, with a market value recently near $136 billion, I’m which someone was willing to a major telecom enterprise. I have the Spectrum brand, a network Baby Jogger, NUK, Calphalon, Contigo, of more than 750,000 miles and more than 31 million customers in buy it and someone else was First Alert, Mapa, Spontex and Yankee 41 states. Who am I? (Answer: Charter Communications) willing to sell it. Candle. I also used to own Jostens, the class- Want to Invest? Email us at [email protected], and we’ll ring company. Who am I? Want more information about stocks? send you some tips to start investing. Sorry, we can’t provide Send us an email to [email protected]. Think you know the answer? We’ll announce it in next week’s edition. individual financial advice. © 2021 THE MOTLEY FOOL/DIST. BY ANDREWS MCMEEL SYNDICatION 4/15.