Comparing PE Ratios and Growth Rates across Firms

The PE ratios and expected growth rates in EPS over the next five years based on consensus esti
are summarized in the following table

Company Name Trailing PE Expected Growth

Coca Cola Bottling 29.18 9.50%
Molson Inc 43.65 15.50%
Anheuser Busch 24.31 11%
Corby Distilleries 16.24 7.50%
Chalone Wine Group 21.76 14%
Andres Wines Ltd 8.96 3.50%
Todhunter Intl 8.94 3%
Brown Forman 10.07 11.50%
Coors 23.02 10%
PepsiCo 33 10.50%
CocaCola 44.33 19%
Boston Beer 10.59 17.13%
Whitman Corp 25.19 11.50%
Mondavi 16.47 14%
Coca Cola Enterprises 37.14 27%
Hansen Natural Corp 9.74 17%
Average 22.66 12.60%

Andres Wines is no longer looking cheap if you compare the PEG RATIO . Hansen Natural looks

PEG=3.60-2.86 Expected growth Rate -3.75 Standard deviation

PEG Hansen Natural=3.60-2.86*17%-3.75*62.45%

0.77

AT a predicted PEG ratio of 0.77 , the Hansen Natural Company is significantly undervalued.
the next five years based on consensus estimates from analysts ,for the firms that are categorized as beverage firms

Expected Growth in % Standard Deviation PEG

9.5 20.58% 3.07
15.5 21.88% 2.82
11 22.92% 2.21
7.5 23.66% 2.17
14 24.08% 1.55
3.5 24.70% 2.56
3 25.74% 2.98
11.5 29.43% 0.88
10 29.52% 2.30
10.5 31.35% 3.14
19 35.51% 2.33
17.13 39.58% 0.62
11.5 44.26% 2.19
14 45.84% 1.18
27 51.34% 1.38
17 62.45% 0.57
12.60 33.30% 2.00

are the PEG RATIO . Hansen Natural looks like a bargain trading at a PEG ratio of 0.57 well below the average for sector . HANSEN is still risk

l Company is significantly undervalued.

ge for sector . HANSEN is still riskier (its standard deviation is almost twice that of the sector) and has higher growth than other firms
er growth than other firms
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.668679
R Square 0.447132
Adjusted R Square 0.368151
Standard Error 0.664489
Observations 17

ANOVA
df SS MS F Significance F
Regression 2 4.999394 2.499697 5.661248 0.015789
Residual 14 6.181633 0.441545
Total 16 11.18103

Coefficients
Standard Error t Stat
Intercept 3.604925 0.504569 7.144557
X Variable 1 -2.85879 3.657016 -0.78173
X Variable 2 -3.74786 1.774691 -2.11184
P-value Lower 95%Upper 95%
Lower 95.0%
Upper 95.0%
4.98E-06 2.522731 4.687119 2.522731 4.687119
0.447394 -10.7023 4.984727 -10.7023 4.984727
0.053155 -7.55419 0.058473 -7.55419 0.058473

PEG=3.60-2.86 Expected growth Rate -3.75 Standard deviation

Upper 95.0%
Company Name Trailing PE
Coca Cola Bottling 29.18
Molson Inc 43.65
Anheuser Busch 24.31
Corby Distilleries 16.24
Chalone Wine Group 21.76
Andres Wines Ltd 8.96
Todhunter Intl 8.94
Brown Forman 10.07
Coors 23.02
PepsiCo 33
CocaCola 44.33
Boston Beer 10.59
Whitman Corp 25.19
Mondavi 16.47
Coca Cola Enterprises 37.14
Hansen Natural Corp 9.74
Average 22.66
Expected Growth Standard Deviation PEG
9.50% 20.58% 3.07
15.50% 21.88% 2.82
11% 22.92% 2.21
7.50% 23.66% 2.17
14% 24.08% 1.55
3.50% 24.70% 2.56
3% 25.74% 2.98
11.50% 29.43% 0.88
10% 29.52% 2.30
10.50% 31.35% 3.14
19% 35.51% 2.33
17.13% 39.58% 0.62
11.50% 44.26% 2.19
14% 45.84% 1.18
27% 51.34% 1.38
17% 62.45% 0.57
12.60% 33.30% 2.00