Back to top

Bear of the Day: Boston Beer (SAM)

Read MoreHide Full Article

The beer business has seen its fair share of changes over the last few years. There have been two major themes across the business; consolidation and craft beer. An industry that used to be spread out across several rival brands has been shrunk to a handful of very large players. Even Miller and Budweiser are under the same roof.

Then there’s the upstart craft beer business. Smaller breweries started popping up all over the US creating a whole new menu of choices for consumers. Larger manufacturers had to adapt to new flavors or buy up the smaller craft brews to keep pace.

Lagging behind these sweeping changes is today’s Bear of the Day Boston Beer Company (SAM - Free Report) . Don’t get me wrong, I love a cold Sam Adams, but when you see the numbers on the stock you may not want to crack your investment account open.

The Boston Beer Company, Inc. produces and sells alcohol beverages primarily in the United States. Its flagship beer is Samuel Adams Boston Lager. The company sells approximately 60 beers under the Samuel Adams and the Sam Adams brands; 20 hard cider beverages under the Angry Orchard brand; 13 flavored malt beverages under the Twisted Tea brand; and 4 hard seltzer beverages under the Truly Spiked & Sparkling brand name, as well as approximately 40 beers under A&S Brewing trade name. It markets and sells its products to a network of approximately 350 wholesalers, who in turn sell to retailers, such as pubs, restaurants, grocery stores, convenience stores, package stores, stadiums, and other retail outlets in Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America. 

Rather than break down the technical chart like I typically do, the easiest way to tell the story of Boston Beer Company is to look at the Price and Consensus chart from Zacks. Here you can see the steady growth year-over-year that helped propel the stock to over $300 per share in early 2015. Then everything took a turn for the worse. Estimates started to come down, growth began to evaporate and the stock tumbled. The selling really hasn’t relented as shares are now trading around $132. Even a couple of earnings surprises to the upside were not enough to turn things around at SAM.

The industry as a whole is in the Top 21% of our Zacks Industry Rank. If you’re looking to gain exposure to this business, you should take a look at Zacks Rank #1 (Strong Buy) Craft Brew Alliance (BREW - Free Report) and Zacks Rank #2 (Buy) Constellation Brands (STZ - Free Report) .

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.                                                                                                            

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Constellation Brands Inc (STZ) - free report >>

The Boston Beer Company, Inc. (SAM) - free report >>

Craft Brew Alliance, Inc. (BREW) - free report >>

More from Zacks Bear of the Day

You May Like