While giant brewers like
Molson Coors (
still dominate the U.S. beer market, craft brewers have managed to
carve out a decent sized niche for themselves. And on a recent
'fact finding mission' that I took to the headquarters of
Boston Beer Company (
in Massachusetts, I can see why many have embraced these smaller
Not only do companies like SAM offer an arguably better beer, but
you can tell that there is a great level of care put into the
product as well. Many consumers have noticed the flavor-or at least
the uniqueness-- and have allowed SAM to grow into the great
position it finds itself in today.
Yet even with the solid level of growth that the company has seen
SAM makes up less than 1.5%
of the total U.S. market, suggesting that Boston Beer clearly has
plenty of room to grow. For this reason, and America's current
obsession with craft beer, this brewer of Boston Lager could be
worth a closer look.
SAM in Focus
The growth for SAM can best be seen in the recent earnings estimate
revision trends for the company. Analysts clearly like the craft
beer story too, as not a single estimate has gone lower for SAM in
the past 60 days, while when zeroing in on the current year, three
estimates have gone up.
The magnitude of the increases has also been impressive, with the
current year surging from $5/share 90 days ago, to the current
level at $5.36/share. Current quarter estimates have also jumped,
suggesting that analysts are quite bullish on the company's
But don't worry about SAM being able to live up to the hype, as the
firm has a pretty solid track record at earnings time. It has
beaten in three of the last four earnings release dates, while its
Zacks ESP is positive, suggesting that it is well positioned to
beat this quarter as well.
Thanks to these factors, SAM has earned itself a Zacks Rank #1
(Strong Buy), meaning that we are looking for some more
outperformance in the weeks ahead. And considering how well SAM did
following the last earnings report, this should definitely be a
stock on your radar.
Not all craft beer is equal
While SAM is well positioned for further gains, it is important to
remember that not all the stocks in the 'beverages-alcoholic'
industry are as highly ranked. In fact, SAM is actually the cream
of the crop from the Zacks Rank perspective, as it is the only one
that has a #1 Rank.
Meanwhile, one of its top craft brew competitors, the
Craft Brew Alliance (
is one of just two stocks that has a Zacks Rank of 5 (Strong Sell)
in this industry (also read
Bear of the Day: Craft Brew Alliance
). So, if you are looking for a beer play in the craft space, you
should probably look to SAM over BREW for hopes of better
performance in this in-focus industry.
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CRAFT BREW ALLN (BREW): Free Stock Analysis
BOSTON BEER INC (SAM): Free Stock Analysis
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