This stock offers limited prospects

Article Excerpt

You should remain wary of stocks that attract broker/media attention because of high-profile products or services, and their business models. Here’s a closer look at one stock with risks that prospective investors should take into consideration: BROWN-FORMAN CORP., $31.00, (New York symbol BF.B; TSINetwork Rating: Average) (www.brown-forman.com; Shares o/s: 427.7 million; Market cap: $14.7 billion; Dividend yield: 2.9%) makes and sells alcoholic beverages. The most important and iconic brand in its portfolio is Jack Daniel’s Tennessee Whiskey, the #1 selling American whiskey globally. Brown-Forman’s sales have come under pressure over the past year as consumers have cut back on buying nonessential goods. There also appears to be other trends that explain lower liquor consumption. These include competition from legal marijuana, the increasing popularity of weight-loss drugs, and health concerns, particularly among the younger generation. Brown-Forman’s longer-term outlook is positive, but the company’s sales and profits will likely remain weak in the near and medium term, especially under any tariff war. While it aims to boost demand…