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Sunday, July 24, 2016

As BREXIT weakens Pound, JOHNNIE WALKER and LUCKY STRIKE get…a LUCKY STRIKE


Weeks after a successful referendum vote for Brexit – and all the political and economic chaos it has unleashed non-stop in its aftermath ever since – it would appear some entities have begun to recover, and even manifest a remarkable turnaround. And believe it or not, people outside the United Kingdom who take a swig of scotch and a smoke might be helping these British companies in getting a win out of Brexit.

Speaking to CNN, multinational banking firm Goldman Sachs would now recommend those in the know to consider investing in Diageo, who owns and makes Johnnie Walker Scotch Whiskey and Guinness Beer, as well as British American Tobacco, this one owner of popular international cigarette brands Lucky Strike, Pall Mall and Dunhill. Theirs is a remarkable comeback story told in the background of the Brexit upheavals.

The moment the “Leave” votes were declared victorious, Diageo and BTI’s stocks, like everyone else’s in the UK, took a nosedive the following Friday June 24. Another drop was recorded Monday the following week (June 27) but the day after that and so on, they have rebounded at a remarkable pace.

In a report submitted by Goldman Sachs analyst Mitch Collett, he sees only good things going for both British consumer giants the farther away the past referendum date goes, and believes that Diageo and BTI stocks were oversold and therefore will be making a tidy sum because of Brexit, for once.

With the Pound Sterling slowly but steadily devaluing in the uncertainty of post-Brexit UKDiageo for one, which exports a significant amount of its alcohol products, stands to continue making money off of exportation. With 90% sales coming from anywhere but the UK, the weaker the Pound gets (£1 = $1.30 as of July 7, 2016) the greater their international earnings. As for British American Tobaccoits European sales amount to only 20% and a measly 1% in the UK itself. The 79% is everywhere else in the world that is not reeling (at least much) from the Brexit talespin.

So if you’re fancying a glass of Johnnie Walker or a stick of Lucky Strike today, give a salute to their makers. They’re doing fine at least, in spite of Brexit.

Photo Credit to hotliked.com

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