DVCMY - Davide-Campari Milano: Toasting While Waiting For Better Prices

2024-06-28 09:53:02 ET

Summary

• Campari, a dominant player in aperitifs and drinks, experienced a 25% stock price decrease prompting a closer look at investment opportunities.
• The company has positive prospects: a new promising CEO, the opportunity for profitability margin expansion and future possible acquisitions.
• The company operates in a highly competitive industry and is not well-positioned to take advantage of the new trend in online sales of alcohol.
• According to recent news, it faces potential prosecution for tax evasion.
• The stock price is too high considering that it has a negative free cash flow. That is why I assign a "hold" rating.

Campari is one of those companies that, if you are Italian like me, you have to know because it dominates in one of the things we love the most: aperitifs and drinks. It is a company that I have closely followed for several months since I perceived a strong brand power but, for different reasons, I never decided to invest my money. After a 25 %-ish stock price decrease on the Italian Stock Exchange, it is time to study the company and decide if now is the right time to pull the trigger on this amazing company....

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