Epoch Investment’s Priest Recommends Nestle, Anheuser-Busch InBev, Microsoft

Thursday, 20 Dec 2012 08:36 AM

By Dan Weil

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Money manager Bill Priest, CEO of Epoch Investment Partners, recommends several stocks in an interview with Forbes Media Chairman Steve Forbes.

Priest’s picks include blue-chips Nestle, Anheuser-Busch InBev, and Microsoft.

• Nestle is “one of the world’s great companies,” Priest says. It generates strong free cash flow — 8 to 10 percent, and almost all of Nestle’s reinvestment and acquisitions “are tilted toward emerging markets, because there’s faster growth there,” he says. The company also increases its dividend every year.

Editor's Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

• Anheuser-Busch InBev has “one of the greatest managements in the world,” Priest says. “They really know how to build a company.” InBev has about 15 brands earning $1 billion in annual revenue. “People drink beer through thick and thin,” he says.

• Microsoft has a business model that most people think is obsolete, but it’s not Priest says. “[T]hey’re number two in search, they’re one of the top 10 cloud providers, they have the leading game console (the Xbox) and they’re the biggest provider of enterprise services.”

Morningstar analyst Norman Young has kind words for Microsoft too. “Although the conventional wisdom regards Microsoft as a technology giant in decline, we see glimmers of a more cohesive strategy through new Windows,” he writes in a report on Morningstar.com.

Young ascribes a fair value of $35 for Microsoft stock. It closed at $27.31 Wednesday.

Editor's Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

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