AG Barr (BAG) 533p
Gain to date: 6.7%
Original entry point: Buy at 499.5p, 7 May 2020

Shares in drinks company AG Barr (BAG) are now trading ahead of our May entry point thanks to investors starting to look beyond fast-growth tech stocks for investment opportunities.

It reassured the market on 18 November by saying trading remained in line with expectations and it also received £7.6 million as compensation for the termination of its distribution agreement with Rockstar. The latter business was acquired earlier this year by PepsiCo.

Investors are now looking more closely at how businesses might recover in 2021, assuming the pandemic is brought under control and vaccines start to be distributed. Rockstar accounted for 8% of AG Barr’s sales volumes so it does have a hole to fill. However, the broader market outlook is looking more favourable for the group and it’s important to take a long-term view of a company when investing.

Broker Shore Capital says: ‘Barr is a class act to us, with experienced and highly capable management, a strong stable of brands, excellent manufacturing and distribution assets and a robust financial constitution.

‘Whilst there have been and remain hurdles to counter, we believe that Barr is in excellent operational shape and very focused on the tasks at hand. As such, we believe this high-quality company is well set for the foreseeable future.’

SHARES SAYS: It’s good to see the share price pick up. This is one to hold for the long-term.

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