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Stock Market News: Anheuser-Busch Goes Shopping; Strong Housing Boosts D.R. Horton

By Dan Caplinger - Nov 12, 2019 at 10:54AM

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Major benchmarks moved toward record highs once again.

Wall Street had a post-holiday celebration on Tuesday morning as investors looked forward to what the White House would say about the status of trade negotiations between the U.S. and China. Global markets have focused a lot of attention on the trade issue, and a favorable conclusion would potentially create a much-needed economic boost. As of 10:45 a.m. EST, the Dow Jones Industrial Average ( ^DJI ) was up 63 points to 27,755. The S&P 500 ( ^GSPC -0.84% ) rose 14 points to 3,101, and the Nasdaq Composite ( ^IXIC 0.00% ) moved higher by 44 points to 8,509.

Merger and acquisition activity has ramped up recently, and Anheuser-Busch InBev ( BUD 0.11% ) joined the fray with an interesting buyout offer. Meanwhile, D.R. Horton ( DHI -0.23% ) reported its latest earnings results, and what the homebuilder said gave investors confidence in the resiliency of the U.S. housing market.

Bud buys a lot of craft beer

Shares of Anheuser-Busch InBev were up about 1% after the company announced that it would buy Craft Brew Alliance ( BREW ). The news came as a surprise, largely because A-B InBev had said it wouldn't move forward with a full acquisition after considering the move back in August.

Three bottles of Budweiser against a red and white background.

Image source: Anheuser-Busch InBev.

The Budweiser maker had already owned a 31% stake in Craft Brew Alliance, but under the terms of its deal, A-B InBev will take full control of the craft beer specialist. Investors in Craft Brew will receive $16.50 per share in cash under the terms of the agreement, putting a value of roughly $321 million on the company.

Craft Brew is expected to join Anheuser-Busch's Brewers Collective, which includes a number of craft breweries across the nation. A-B InBev touted the investments it's made in those craft brewing partners, investing money to expand operations and fueling local economic growth.

Given the size of A-B InBev, the Craft Brew acquisition won't necessarily make a huge difference from a financial perspective. However, the strategic move has ramifications for how the beer giant navigates changing conditions in the industry, and it might spur competitors to seek out their own craft beer partnerships.

D.R. Horton climbs on housing strength

Shares of D.R. Horton rose almost 2% after the homebuilder released its fiscal fourth-quarter financial results. The Texas-based company finished what it said was its 18th consecutive year as the largest homebuilder in the U.S. market.

D.R. Horton's financial metrics looked strong. Home transaction closures were up 9% to 16,024 homes, representing $4.8 billion in value. Net sales orders climbed an even more impressive 14% to 13,130 homes, for another $4 billion. Earnings per share rose 11% compared to the year-earlier period. Those numbers were consistent with the previous quarter, and the company's full-year growth was similarly impressive.

The homebuilder has also remained optimistic about its stock. D.R. Horton bought back 2.1 million shares during the quarter, capping a fiscal year in which it spent almost $480 million on buybacks.

At this point, D.R. Horton has high hopes that it'll be able to maintain its leadership position in the U.S. housing market. With a reasonable level of inventory on its books, good demand, and efficient operations, D.R. Horton has continued to move to all-time highs, having fully recovered from the challenges of the housing crisis in the mid-2000s.

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Stocks Mentioned

Anheuser-Busch InBev SA/NV Stock Quote
Anheuser-Busch InBev SA/NV
$56.46 (0.11%) $0.06
D.R. Horton, Inc. Stock Quote
D.R. Horton, Inc.
$102.54 (-0.23%) $0.24
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,538.43 (-0.84%) $-38.67
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$15,381.32 (0.00%) $0.00
Craft Brew Alliance, Inc. Stock Quote
Craft Brew Alliance, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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