I have been working in the logistics sector for almost two decades. I have been into stock investing and macroeconomic analysis for almost a decade. Currently, I focus on ASEAN and NYSE/NASDAQ Stocks, particularly in banks, telco, logistics, and hotels. Since 2014, I have been trading on the PH stock market. I focus on banking, telco, and retail sectors. A colleague encouraged me to engage in the stock market as part of my portfolio diversification instead of putting all my savings in banks and properties. ...

Ambev (NYSE:ABEV) is one of the most undervalued penny stocks to buy right now. On February 12, Ambev reported its Q4 2025 financial results, where the company achieved a stated net income of nearly 16 billion BRL, with EPS increasing by 8.2% year-over-year. The company’s digital ecosystem saw robust performance, with the B2B marketplace GMV growing 70% and consumer delivery GMV rising 13% to 4.7 billion BRL. Quarterly revenue totaled $4.76 billion, which modestly rose by 2.31% year-over-year. Despite fi ...

Core Viewpoint - The article discusses the author's extensive experience in researching various companies across different sectors, emphasizing a focus on value investing and a particular interest in metals and mining stocks. Group 1: Company Research - The company has over a decade of experience in in-depth research across multiple industries, including commodities like oil, natural gas, gold, and copper [1] - The company has transitioned from writing a blog to creating a value investing-focused YouTube channel, where it has researched hundreds of different companies [1] - The company expresses a preference for covering metals and mining stocks but is also comfortable with sectors such as consumer discretionary/staples, REITs, and utilities [1]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging [1] Group 1: Company Overview - Ambev (ABEV) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's real growth prospects beyond traditional metrics [2] - The company has a favorable Growth Score and a top Zacks Rank, indicating strong investment potential [2] Group 2: Earnings Growth - Ambev's historical EPS growth rate is 1.3%, but projected EPS growth for this year is 2.8%, significantly outperforming the industry average of 1.1% [4] Group 3: Asset Utilization - Ambev has an asset utilization ratio (sales-to-total-assets ratio) of 0.62, indicating it generates $0.62 in sales for every dollar in assets, which is higher than the industry average of 0.52 [5] Group 4: Sales Growth - The company's sales are expected to grow by 13.3% this year, contrasting sharply with the industry average of -0.1% [6] Group 5: Earnings Estimate Revisions - The current-year earnings estimates for Ambev have been revised upward by 2.8% over the past month, reflecting a positive trend in earnings estimate revisions [7] Group 6: Investment Potential - Ambev has achieved a Growth Score of B and a Zacks Rank of 2 due to positive earnings estimate revisions, suggesting it is a solid choice for growth investors [9]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Ambev (ABEV) - Ambev currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Performance Metrics - ABEV shares have increased by 5.78% over the past week, outperforming the Zacks Beverages - Alcohol industry, which rose by 1.31% [5] - Over the past month, ABEV's price change is 18.46%, significantly higher than the industry's 4.04% [5] - In the last quarter, ABEV shares rose by 22.71%, and over the past year, they gained 61.26%, while the S&P 500 only increased by 2.88% and 13.25%, respectively [6] Trading Volume - ABEV's average 20-day trading volume is 26,425,038 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for ABEV has increased, raising the consensus estimate from $0.18 to $0.19 [9] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions during the same period [9] Conclusion - Given the strong performance metrics and positive earnings outlook, ABEV is recommended as a solid momentum pick with a Momentum Score of A [10]

Core Viewpoint - Ambev (ABEV) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in a company's earnings picture, specifically tracking the Zacks Consensus Estimate for EPS from sell-side analysts [1][2]. - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, leading to stock price movements based on their investment actions [4]. Ambev's Earnings Outlook - The Zacks Consensus Estimate for Ambev indicates earnings of $0.19 per share for the fiscal year ending December 2026, unchanged from the previous year [8]. - Over the past three months, analysts have raised their earnings estimates for Ambev by 2.8% [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Ambev to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Viewpoint - The comparison between Ambev (ABEV) and Brown-Forman B (BF.B) indicates that ABEV presents a better value opportunity for investors at this time due to its stronger earnings outlook and favorable valuation metrics [1][7]. Valuation Metrics - ABEV has a forward P/E ratio of 16.65, while BF.B has a forward P/E of 17.47, suggesting ABEV is more attractively priced [5]. - The PEG ratio for ABEV is 2.27, compared to BF.B's PEG ratio of 7.80, indicating ABEV's earnings growth is more reasonably priced [5]. - ABEV's P/B ratio stands at 3.05, while BF.B has a P/B of 3.35, further supporting ABEV's valuation advantage [6]. Analyst Outlook - ABEV currently holds a Zacks Rank of 2 (Buy), reflecting a more favorable earnings estimate revision trend compared to BF.B, which has a Zacks Rank of 3 (Hold) [3]. - The solid earnings outlook for ABEV positions it as the superior value option in the beverage-alcohol sector [7]. Value Grades - ABEV has been assigned a Value grade of B, while BF.B has a Value grade of D, highlighting ABEV's stronger valuation profile [6].

Company Overview - Ambev S.A. (NYSE:ABEV) is a major Brazilian-based brewery and beverage company, producing and distributing a diverse portfolio of beer, carbonated soft drinks, and other non-alcoholic beverages across the Americas. It operates in 18 countries and is a subsidiary of Anheuser-Busch InBev, with strong market leadership in Brazil [4]. Financial Performance - For the fourth quarter, Ambev reported revenues of R$24.81 billion, exceeding consensus estimates by R$210 million, despite an 8.2% year-over-year decline attributed to a 3.6% decrease in consolidated volumes due to cyclical consumption factors [1][2]. - The company's fourth-quarter profit fell by 9.9% year-over-year to R$4.53 billion, resulting in earnings per share of R$0.28, down from R$0.31 in the same period last year [2]. - Cash flow from operating activities decreased by 4.8% to R$13.91 billion, while full-year cash flow dropped 6.3% to R$24.45 billion [3]. Shareholder Commitment - Ambev has affirmed its commitment to shareholder value by announcing a R$20 billion return through share buybacks and dividends [3]. Future Outlook - Management remains optimistic about the beer category, citing the strength of their portfolio and successful innovations as key factors for potential growth opportunities by expanding the consumer base and increasing consumption occasions [4].

Financial Data and Key Metrics Changes - The company achieved a consolidated normalized EBITDA margin expansion of 50 basis points, reaching 33.4%, driven by a 7.5% growth in net revenue per hectoliter and improved financial discipline [18][19] - Stated net income reached almost BRL 16 billion, with stated EPS increasing by 8.2% year-on-year, while normalized EPS increased by 2% [20] - Cash flow from operating activities totaled BRL 24.5 billion, which was BRL 1.6 billion lower than the previous year due to softer volumes impacting working capital [21] Business Line Data and Key Metrics Changes - In Brazil Beer, full-year volumes were in line with a soft industry, with market share expanding meaningfully in Q4 as conditions improved [12][13] - Premium and super premium volumes increased by high teens, while non-alcoholic beverages grew around 30%, reflecting strong portfolio brand equity [14] - The BEES Marketplace saw full-year GMV grow by 70%, driven by third-party expansion, while Zé Delivery closed 2025 with BRL 4.7 billion in GMV, up 13% year-on-year [10] Market Data and Key Metrics Changes - The consumption recovery in Argentina is taking longer than expected, but performance improved sequentially throughout the year [16] - In the Dominican Republic, the consumption environment improved sequentially, with beer gaining share of alcoholic beverages [16] - In Canada, the company outperformed both beer and beyond beer industries, supported by strong brand performance [16] Company Strategy and Development Direction - The company is focused on long-term value creation through disciplined execution of its capital allocation framework, emphasizing organic growth and selective M&A opportunities [18][22] - The strategy is built on three pillars: strengthening the core business, leveraging data and technology, and enhancing operational efficiency [9][11] - The company aims to maintain accessibility in pricing while protecting profitability, balancing the need for core brand relevance with premiumization [70] Management's Comments on Operating Environment and Future Outlook - The management noted that 2025 was a challenging year due to adverse weather conditions impacting beer consumption, but they are optimistic about 2026, citing events like the FIFA World Cup and a holiday-rich calendar as growth drivers [24][25] - The management emphasized that beer remains a culturally relevant category in Latin America, with strong fundamentals and room for growth [8][25] - The company is prepared for potential challenges in 2026, including cost pressures from commodities, but remains focused on margin expansion [22][72] Other Important Information - The company announced approximately BRL 20 billion in shareholder returns in 2025, the highest in its history, through dividends, interest on capital, and a share buyback program [12] - The effective tax rate for the year was 17.7%, reflecting one-off effects, with a normalized rate of approximately 20% [20] Q&A Session Summary Question: Insights on Brazil's beer volume growth in December - Management explained that the growth was driven by improved weather conditions and market share gains, with October being the main drag on performance [30][31] Question: Thoughts on sustaining profitability and cost management for 2026 - Management highlighted the need for continued focus on cost initiatives and resource allocation to maintain margin expansion, with guidance for cash COGS per hectoliter expected to increase between 4.5% and 7.5% [39][40] Question: Capital allocation and dividend policy for 2026 - Management indicated that discussions on dividends will continue quarterly, focusing on cash generation and maintaining a balance between growth investments and shareholder returns [47] Question: Strategic vision regarding core brands and portfolio performance - Management reaffirmed the importance of core brands in the portfolio, emphasizing ongoing efforts to keep them relevant while also expanding premium offerings [54][55] Question: Impact of GLP-1 drugs on the portfolio - Management noted no significant impact from GLP-1 drugs but acknowledged the need to monitor emerging trends and consumer preferences [63] Question: Pricing strategy and mix considerations for 2026 - Management discussed the dual focus on maintaining accessibility for core brands while also protecting profitability through strategic pricing and revenue management [70][71]

Financial Data and Key Metrics Changes - The company achieved a consolidated normalized EBITDA margin expansion of 50 basis points, reaching 33.4%, driven by net revenue per hectoliter growth of 7.5% and operational efficiencies [18][19] - Stated net income reached almost BRL 16 billion, with stated EPS increasing by 8.2% year-on-year, while normalized EPS increased by 2% [20] Business Line Data and Key Metrics Changes - In Brazil Beer, full-year volumes were in line with a soft industry, with market share expanding meaningfully in Q4 as conditions improved [12][13] - Premium and super premium volumes increased in the high teens, while non-alcoholic beverages grew around 30% [14] - BEES Marketplace's GMV grew 70%, and Zé Delivery delivered BRL 4.7 billion in GMV, up 13% year-on-year [10] Market Data and Key Metrics Changes - The beer category in Brazil faced headwinds primarily due to cyclical factors and weather conditions, impacting out-of-home consumption [7][8] - The Dominican Republic and Canada saw sequential improvements in consumption, with beer gaining share of alcoholic beverages [16] Company Strategy and Development Direction - The company is focused on three strategic pillars: category leadership, leveraging data and technology, and enhancing operational efficiency [9][11] - The strategy aims to bridge the gap between beer's potential and actual consumption, fostering category growth [8] - The company plans to continue investing in organic growth, maintain a disciplined approach to M&A, and return excess cash to shareholders [22] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the beer category's fundamentals and its potential for growth, particularly in Latin America [7][25] - The upcoming FIFA World Cup and a holiday-rich calendar in Brazil are expected to create favorable conditions for socialization and beer consumption in 2026 [24][25] Other Important Information - The company announced approximately BRL 20 billion in shareholder returns in 2025, the highest in its history [12] - The effective tax rate for the year was 17.7%, influenced by one-off effects [20] Q&A Session Questions and Answers Question: Insights on Brazil's beer volume growth in December - The management attributed the growth to improved weather conditions and market share gains, with October being the main drag on performance [30][32] Question: Thoughts on sustaining profitability and cost management for 2026 - The company plans to continue focusing on cost efficiencies and maintaining disciplined resource allocation to support margin expansion [34][39] Question: Capital allocation and dividend policy for 2026 - The management indicated ongoing discussions about dividend distributions, emphasizing a consistent return to shareholders while considering organic growth investments [46][49] Question: Strategic vision regarding core brands and premiumization - The management believes in the importance of core brands for accessibility and plans to keep them relevant while also expanding premium offerings [54][56] Question: Impact of GLP-1 drugs on the portfolio - The management has not observed a significant impact from GLP-1 drugs but is monitoring the situation and adapting the portfolio to meet consumer needs [63][66] Question: Pricing strategy and mix considerations for 2026 - The company aims to balance accessibility with profitability in its pricing strategy, leveraging a complete portfolio to manage revenue effectively [71][74]