Molson Coors: Value Play or Dying Industry Bet?

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On November 6, 2025, Skylands Capital disclosed a 70,440-share purchase of Molson Coors Beverage Company (TAP +4.15%), swelling its stake to 180,650 shares valued at $8.17 million. The transaction, filed with the SEC for the quarter ended September 30, 2025, represents 1.13% of the fund’s reportable assets-a position placed firmly outside its top five holdings.

The Arithmetic of Decline

The acquisition arrives as Molson Coors trades at $45.18 per share-a 17% annual drop and 35 percentage points below the S&P 500’s performance. With revenue of $11.63 billion (TTM) and a 4.13% dividend yield-the highest since 2020-the company presents as a textbook value stock. Yet its enterprise value of six times EBITDA masks a deeper arithmetic: a 50% plunge from its 2016 peak suggests structural rot, not temporary mispricing.

The Illusion of Safety

Molson Coors operates within the so-called “consumer defensive” sector, a label that assumes beer remains a staple akin to toothpaste or bread. But the data tells another story. Millennials and Gen Z in the U.S. are abandoning beer at unprecedented rates, favoring sobriety or alternatives like hard seltzer. This is not a cyclical downturn but a secular shift-a fact obscured by the company’s global footprint across 40+ countries. Distribution networks and brand recognition, once moats, now resemble sinking ships in a drying sea.

Portfolio Contortions

Skylands Capital’s bet appears paradoxical. The firm’s top holdings-Union Pacific ($53M), Alphabet ($46.97M), and Apple ($27.39M)-reflect a modernity its Molson Coors stake denies. The purchase echoes the fabled “buy the dip” strategy, yet dips become avalanches when demographics turn hostile. The dividend, while generous, depends on continued consumption of Coors Light-a product whose heyday coincided with the presidency of George W. Bush.

Valuation Games

Free cash flow remains robust, a testament to entrenched distribution and cost discipline. Share buybacks and dividend growth could yet reward shareholders, much as tobacco stocks did in the 20th century’s back half. But this requires ignoring the moral calculus of profiting from declining demand-or worse, betting that consumers will cling to fading habits until the last keg is tapped. The math checks out; the ethics do not.

The truth is simple: Molson Coors is not a value stock but a warning. Its discounted price reflects not market irrationality but a future where beer’s cultural grip loosens further. Investors who mistake desperation for opportunity may find themselves nursing losses long after the bar closes. 🍻

Glossary

AUM: Assets Under Management; the total market value of investments managed by a fund or firm.
13F assets: Securities reported by institutional investment managers in quarterly SEC Form 13F filings.
Quarter over quarter: A comparison of financial or operational results from one fiscal quarter to the next.
Dividend yield: Annual dividends paid by a company divided by its share price, expressed as a percentage.
Trailing twelve-month (TTM): The 12-month period ending with the most recent quarterly report.
Consumer defensive sector: Industry segment including companies that produce essential goods, less sensitive to economic cycles.
Reportable assets: Investment holdings that must be disclosed to regulators, such as those reported in SEC filings.
Position size: The amount or value of a particular security held within a portfolio.
Filing: An official document submitted to a regulatory authority, often containing financial or ownership information.
Market value: The current total value of a security or portfolio based on prevailing market prices.

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2025-11-07 22:48