You have to know when to hold, when to fold, and when to buy stock in an international brewery that will see better days this coming year.

According to The Motley Fool, Molson Coors Brewing(TSX:TPX.B)(NYSE:TAP) has had a tough year, with the stock is down 12.4% year to date.

The company owns the popular Carling, Rickard’s, Blue Moon/Belgian Moon, Keystone, and Pilsner brands and is one of the largest beer producers in North America. However, beer consumption on the continent declined 1.9% this year compared to last year. Considering the rise of microbreweries and the growing health concerns over alcohol consumption, this trend seems likely to continue.

However, the stock seems to have plunged far beyond the company’s fundamentals. Molson Coors generated US$1.9 billion in operating cash flow and nearly a billion in levered free cash flow. That translates to $1.3 billion in levered free cash flow in Canadian dollars and implies a price-to-cash flow ratio of 11. 

Also, the stock trades at a 25% discount to book value per share. In other words, it is severely underpriced and could deliver stunning returns if market value catches up to fundamentals. If the company’s bets on emerging markets and cannabis-infused drinks pan out as expected, the potential stock upside could be 100% or more.

“I believe the company’s efforts to scale up these new verticals will finally show traction in 2020, which makes this the perfect time to add some exposure to this stock,” says The Motley Fool.

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