Reevaluation

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Reevaluation
PRESENTED BY AMANDA BRIGHTBILL
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About DIAGEO

• Produces and distributes wines, liquors, and beer
  worldwide, including premium brands like
  Smirnoff, Johnnie Walker Scotch whiskies,
  Guinness stout, Baileys Original Irish Cream
  liqueur, JB Scotch whisky, Captain Morgan rum,
  and Tanqueray gin. Diageos other spirits brands
  consist of Crown Royal Canadian whisky,
  Buchanans De Luxe whisky, Gordons, Windsor
  whisky, Bells Extra Special whisky,
  Dimple/Pinch, Seagrams 7 Crown American whiskey,
  Old Parr, Seagrams VO Canadian, Ursus, Bushmills
  Irish whiskey, and Bundaberg rum wine brands
  include Beaulieu Vineyard, Sterling Vineyards,
  Blossom Hill, and Piat DOr and beer brands
  comprise Harp Irish lager, Smithwicks ale, Malta
  non-alcoholic malt, and Red Stripe lager. It
  also owns the distribution rights for the José
  Cuervo tequila brands in the United States and
  other countries.
• Headquartered in London, England and was founded
  in 1886
  

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DEO
Sector Consumer Staples Industry Beverages/Alco
hol Market Cap 51.32 B Beta .58 (Yahoo) .16 (R
euters) 52 Week Range 57.70 - 75.10 Current P
rice 74.32 Employees 22,966 P/E 19.61 Shar
es Shorted 1.01 M
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Key Ratios
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Value Ratios
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Intrinsic Value
FCFE 101.10 P/E Target (5.14 X 20.19)
103.78 / (1.10) 94.35 (4.18 X 20.19) 84.
39 / (1.10) 76.72 Intrinsic Value .6(10
1.10) .4(94.35) 98.40 .6(101.10) .4(76.72
) 91.35 Current Price 74.90
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Qualitative Factors
Strengths world brands vs. national or local,
consumer staples and the economy, strong demand
for spirits over beers, high dividend yield,
lower future p/e, marketing in new markets (China
and Brazil), paying down debt, targets age
appropriate audiences Weaknesses not growing as
fast as others, next year estimates are lower,
regulations/taxation Opportunities to use more p
roduction capacity, globalization, growth at the
rate of the competitors, emerging markets
Threats competitors growing to the same scale
- No red flags in corporate governance
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Stock Chart
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Competitors
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The Future
EPS estimate 4.18 - 5.14 EPS 5-Year Growth Rat
e 17.41 Forward P/E 15.77 Future Price 76.8
8 (current 74.90) Future EPS 4.20 (current 4.
79) http//www.fool.com/News/mft/2006/mft0610192
0.htm?sourceeptyholnk303100logvisitynpuy
Growth Product Innovation, Marketing, Exclusive
U.S. Distribution System, Acquisitions, and
Emerging Markets
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DIAGEO (DEO)
Current Price 74.32 52 week Hi/Low 57.70 - 7
5.10
Intrinsic Vale 99.70 or 88.02
HOLD