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Happy Hour for Heineken Investors

This column was originally published on RealMoney on Nov. 1 at 10:19 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

"It takes something new to produce a startling advance in the price of a stock," says William O'Neil in his investing bible, How to Make Money in Stocks.

Besides a new, quick-selling product or service, he says "it can also be a change of management that brings new vigor, new ideas or at least a new broom to sweep everything clean."

Enter Jean-Francois van Boxmeer, who took over the helm of Heineken (HINKY) one year ago.

In doing so, he not only brought out the broom with a 200 million euro cost-cutting program at the Dutch brewer, but also helped to revitalize the U.S. business with the rollout of Heineken Premium Light and to oversee the successful integration of several Russian acquisitions.

As a result, in van Boxmeer, Heineken has one of the key ingredients needed to produce a startling advance. Indeed, the stock has enjoyed a 35% gain in the past year. Even so, I believe there's still more upside.

Part of that is the macro wind filling the company's sails, as consumers worldwide trade up in beer. While the overall global beer market is increasing at an uninspiring 2.7% yearly clip, the more profitable international premium segment -- led by the core Heineken brand -- is seeing 6.4% annual growth.

The rest of the upside is specific to Heineken.

From Russia With Love

First, consider Russia. While vodka undoubtedly its national drink, the country also has one of the world's fastest-growing beer markets, having doubled in size since 1999, according to UBS.

Russia also happens to be Heineken's biggest market by volume, the result of its nine acquisitions over the past two years. With 13 million hectoliters (or more than 343 million gallons) of Heineken beer sold in the country during its last fiscal year, the brewer now owns a 14% share of the Russian beer market and stands as the clear No. 3 player.

But it's not done yet.

In fact, van Boxmeer has called Russia "the cornerstone of future development of Heineken." The company is integrating the Russian acquisitions ahead of plan and aims to boost its share of this beer market to 20% over the next five years or so.

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