I've mentioned that you should check out
Boston Beer Company (
in the past, and right now shares are trading at a fairly
attractive technical level.
The company is headquartered in Boston, Massachusetts, and while
it's not likely to double in the next year the brewer, it is in a
sector that tends to prove resilient regardless of what's going on
in the economy. The stock has also been a constant performer, and
the recent pullback from $100 to around $90 represents a good
The company has a record of profitability. With analysts
expecting 10 percent revenue growth and 11 percent earnings per
share growth in 2011, I believe the stock should resume its climb
I began covering the U.S. beer market this past summer after
hearing reports of yet another blockbuster year for the Vermont
Brewers Festival. With over 30 different breweries from the region
participating, the turnout was strong and the beers varied.
I've since noticed the massive amount of shelf-space dedicated
to craft and micro brews at my local gas stations, convenience
stores, and liquor stores. After realizing that I was a huge fan of
many of these frothy offerings I began researching growth stock
investment opportunities in the craft brewing industry.
Craft Brewers Association (
, Boston Beer is the only publicly traded craft brewer in the
Craft beers are produced at a small brewery with output of no
more than 2 million barrels a year. According to the report
released by the Brewers Association the number of these types of
breweries is steadily increasing.
But more breweries will mean increased competition - so
differentiation is critical for companies to be successful over the
long-term. According to Brewers Association (the largest
organization of brewers in the U.S.), craft beer now accounts for
around 5 percent of the total U.S. beer market.
Consumers are becoming increasingly interested in the craft
brewing segment. And they're buying those beers instead of the mass
Boston Beer produces the popular Samuel Adam's Lager and Twisted
Tea, as well as a huge variety of seasonal offerings. The company
is headquartered in Boston, Ma, and has breweries in Massachusetts,
Ohio, and Pennsylvania.
Boston Beer recently reported results for the three months ended
September 25, 2010. The company's revenue increased to $124.5
million, up 14.5 percent from the comparable three months of 2009.
The company also increased shipments by 13 percent.
Boston Beer is growing fast enough that it may soon outgrow
craft beer status. The brewer expects to sell more than 2 million
barrels by 2012. But just because the company may outgrow the
'craft brewer' definition doesn't mean it isn't a compelling
investment. It may just be in the sweet spot - small enough to gain
greater popularity as a top-quality brewer but large enough to gain
distribution efficiencies and greater shelf space.
The homegrown element of craft beers is also something that's
very appealing to the growing number of consumers who subscribe to
the local food movement. If these people like to purchase food
that's grown closer to home, it's rationale to assume they like to
do the same with beer. Of course, buying a 'local' beer that brewed
on the other side of the country isn't exactly in-line with the
local-vore food movement, but the idea is pretty much the same -
and it's easier to bottle and ship a craft brew than a dozen cherry
: Small Cap Investor PRO lead research analyst Tyler Laundon
currently owns shares of SAM