Anheuser-Busch InBev (NYSE:BUD) was up around 40% year to date before the stock took a big hit a week ago when the company released its third-quarter results.
Disappointing numbers in the Chinese and U.S. markets didn’t sit well with investors, nor did a lack of EBITDA growth. Although it was still a good quarter, there just wasn’t enough to get the stock moving.
The selloff has been so severe over the past several days that it has sent Anheuser-Busch into oversold territory, with a Relative Strength Index (RSI) below 24.
The RSI indicator, which measures a stock’s gains and losses over the past 14 trading days can be helpful in gauging just how excessive the selling has been. And in Anheuser-Busch’s case, it’s been severe – the last time the stock was this badly oversold was back in December of last year when the markets as a whole were performing poorly.
Had you invested in the stock back then, you could have bought shares for about $65 and made a great return had you held on since then.
However, there’s no guarantee that will happen again as the stock is considerably higher than it was back then. But with a strong brand and a price-to-book multiple a little over two, it could still be a good deal for a top stock.
Sometimes all it takes is a popular new product that can get consumers excited about a company, and that could lead to a boost in sales. While Anheuser-Busch may be down this quarter, there’s no reason to discount the stock over the long haul.
