After much deliberation, I recently bought some more Diageo (LSE: DGE) shares for my portfolio. The timing turned out to be pretty good – in the last week, the share price has jumped about 6%.

Of course, the shares are still well down from their highs. But could this be the start of the rebound investors are looking for?

A new chapter for Diageo

Looking at Diageo today, there are plenty of reasons to be bullish. For a start, there’s a new CEO on board (Dave Lewis). And he’s already looking to streamline the business.

According to Bloomberg, Lewis is considering offloading assets in China. Specifically, he’s looking to dump the company’s stake in baijiu-maker Sichuan Swellfun.

I calculate that Diageo’s stake here could be worth around $1.7bn. So selling this could free up a fair bit of cash, enabling the company to pay down its sizeable debt pile.

Note that there are plenty of other assets that Lewis could offload to streamline the business. Apparently, the company’s currently reviewing its ownership of the Royal Challengers Bengaluru cricket team, which is worth around $2bn.

Immune to AI?

Another reason to be bullish is that ‘old economy’ stocks like this are starting to get more attention from investors due to the fact that they’re relatively immune to artificial intelligence (AI). While AI’s going to disrupt a lot of companies, it’s unlikely to have a negative impact on an alcoholic beverages company.

Of course, there are other forces that could disrupt Diageo’s business in the years ahead, including GLP-1 weight-loss drugs, regulatory intervention (eg cancer warnings on alcohol bottles), and changing drinking habits. But in terms of AI, this company appears relatively safe and this immunity could potentially lead to a higher valuation.

Sporting a low valuation

Speaking of the valuation, it remains low. For the year ending 30 June 2027 (next financial year), analysts are forecasting earnings per share of $1.69.

So at today’s share price, we have a forward-looking price-to-earnings (P/E) ratio of just 14. That’s an undemanding earnings multiple for a company with a portfolio of world-class brands, so there’s definitely scope for an upward valuation re-rating at some point.

Massive insider buying

One other thing worth pointing out is that earlier this year, a top-level insider at Diageo bought nearly £500,000 worth of shares. Insiders only buy stock for one reason – they believe it’s going up in price.

An investment opportunity?

Of course, it’s still too early to know if the recent share price move higher is the start of a major rebound. Disappointing half-year results later this month (23 February) could lead to share price weakness.

Taking a medium-to-long-term view however, I’m optimistic that this stock can move materially higher. I believe it’s worth a closer look right now while it’s well below its highs.