A Toast to Alcoholic-Beverage Stocks

S&P thinks issues in the distillers and vintners group will continue to outperform the broader market. Its top-shelf pick: Brown-Forman

Shares of Anheuser-Busch (BUD) were up sharply May 23 after unconfirmed reports in The Wall Street Journal that Belgium-based InBev (INTB.F) has an interest in acquiring the largest U.S. brewer. Our subsequent downgrade of Anheuser shares to 3 STARS (hold) from 4 STARS (buy) gave reason not to focus on this subindustry for this weekly "Sector Watch" article. Prior to this news, and the subsequent surge in Anheuser's share price, the Brewers group had a constructive relative strength chart, in our opinion, possibly as a result of the market's recent weakness and investors' renewed attention to defensive issues.

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