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Craft Brew Alliance, Inc. Message Board

  • sdenver sdenver Dec 21, 2008 8:23 PM Flag

    Am I the ONLY one buying?????

    There has to be someone who thinks like me they will survive???? We are buying at less than 1/4 discounted tangible book value. The could go OB and shareholders would the rest of the company after the debt holders are paid off in a liquidation. Come on someone has the guts like me to buy...anyone????

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    • sdenver,

      I believe CBA has a reasonable chance at survival, but I need to see some movement toward profitability. I would hope that by 4Qtr2009 they can post a 10% EBIT/Revenue. To achieve that, management has to lower expenses as a percentage of sales. I would like to see Cost Of Revenue + Selling, General & Administration, coming in at 90% of Total Revenue or less. I believe that is doable, but it is going to take some discipline.

      Assuming Yahoo's numbers and my calculations are correct, the3Qtr2008 "(COR+SG&A)/Revenue" ratios are: HOOK, 102.4%; SAM, 99.5%; TAP, 82.6%; STZ, 91.6%; and WVVI, 88.6%. It's pretty obvious that both HOOK and SAM are hurting. Not a fair comparison, but here's some more ratios: KO, 71.1%; PEP, 82.2%; and COT, 98.7%.

      On a personal note, I find it depressing that the only CBA brand available in my area (Cleveland, Ohio) is "Goose Island" (Chicago). Redhook products disappeared from the shelves in the 2Qtr2008 (I had no problems purchasing Copperhook during 1Qtr2008), the single Widmer product that was occasionally available disappear about two years ago. Too much local competition?

      Regards,
      jad

      • 1 Reply to jad1148
      • jad, Why do you think SAM is hurting? They had the expenses of the new brewery and the costs associated with the glass recall that they will probably recover. Because of these issues, their 3rd quarter numbers aren't representative of the fact that depletion's grew 12% while revenue increased 20%. That is a fairly positive trend as the new plant becomes more efficient with more contract brewing coming in house and shipping costs falling.

        Your assessment about too much local competition for HOOK products is dead on. That being said, go see how much it has hurt SAM's distribution. Also, as for HOOK needing to cut costs even more, how exactly are they going to increase sales in that environment? They don't have enough sales and marketing as is? Do you think they will make it to 4th Qtr. 2009 with no money, hence no way to grow sales?

    • Why buy now, when Brito has the only say at this stage? Without INBEV support the money burn can really heat up quickly. Much safer to wait this out and buy other discounted companies that control their own business.

      Also, if you are buying now why are you begging for other buyers to come on board and help raise the price a bit? If you are really confident you wouldn't want other buyers, or is it just maybe you want to sell the POS stock?

      • 1 Reply to bbdott
      • bbdott

        come on man I am not begging others to buy I am asking if there is any other investor out there that knows how to value a company. You and I disagree but I never says thing like you said about me wanting to sell this POS and stuff come on man that is weak. You and safety trade barbs all the time but I am here for an intelligent discussion. I am not pumping I am saying we have a stock selling for one quarter tangible book value. That is nuts. You can rant and rave about Inbev etc but that does not matter at this price.

        You and I agree on SAM a great company we just disagree on the price which by the way gets closer to my $20 price daily. I have said for some time SAM would struggle for a period switching to a full brewer model form virtual but long term SAM is a big winner in my opinion. SAM dominates the sector and the mindshare the brand has is amazing. The other night I rented a limo for my wife and friends and we all stopped to buy beer to stock the limo. I watched to see what everyone was buying. It was neat to see CBA do well two people bought Longhammer one Kona and five people bought different SAM products. I think they can all co-exist. One risk for SAM long term is Inbev decides to use HOOK as a SAM killer and instead of charging HOOK high fees to distribute the product ETC they take no fee's and use the vehicle to try to crush SAM. You laugh but it is not crazy. They could do it at arms length. We will see but long term I think they both do well and I could see SAM having 5% market share one day and CBA having 1%

 
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