Update Ambev (ABV)

A great first quarter for Ambev (ABV) up against some very tough year-to-year comparisons. Earnings per share grew by 24.7% and net sales by 8.2% in the first quarter, the company reported on May 5. Costs rose but the company still managed to show a 0.1 percentage point increase in companywide margins as the higher margin Brazilian business grew faster than operations in the rest of Latin America and Canada.

With the Brazilian stock market facing strong headwinds in 2010 from the Banco Central do Brazil’s decision to raise interest rates to fight inflation, I would be tempted to sell these shares and sit the year out—except that Ambev is very likely to lift the cap on dividends it imposed in 2009 to increase its debt repayments. Read more

Update AmBev (ABV)

On March 4 AmBev (ABV) reported fourth quarter earnings before interest, taxes, depreciation, and amortization grew by 9.1% from the fourth quarter of 2008. Total net sales increased by 13.9% from the year-earlier period on an 11.6% increase in volume in Brazil. Read more