Small stock has gone from .35 cents to 35.00 a share in last year on buyout offer from Green Mountain Roasters ....DDRX is a coffee roaster.....has a coffee bar in Portland regon called Coffeepeople...? wow what can small stocks do .....Zume o 2x sales buyout bid......2x sales for Hook would be 14.00 a share....
SD, I was kidding you, trying to show that they overpaid for a very limited capacity increase. HOOK's total rated capacity in all 3 plants is less than SAM has in either of their production plants. SAM has no debt, makes money and advertises heavily, while HOOK is burdened with debt, doesn't have money to market and they have limited upside capacity if they ever did find a national growth brand. That being said, the main reason HOOK is cheap is INBEV control.
safety, as I said Goose expanded quite a bit geographically, plus that volume increase includes the lower margin Trader Joes contract beer and the big volume low margins from Costco. Like Widmer, it's very easy to expand into new markets with BUD distributors, but profitable volume growth is much tougher. How much money did the HOOK minority interest, in that big volume growth Goose Island add to the HOOK bottom line? Try looking under the income from minority interest. Remember it includes that fast growing Kona too.
BBdott what do you mean what brewery expansion? Widmer (hook) did a huge expansion ...that is where the debt came from. They will not have large capex for 5-10 years as they grow into the capacity and produce larger and larger free cash flow. SAM is in the same position but it is not nearly as cheap as HOOK
Well Goose Island produced 100,000 barrels in 2008 and 132,000 barrels in 2009 .....so i guess that ain't growth .....It's 40% owned by Craft Brands and now pays ditributions on earnings to Craft Brands ....you can see that in the last 10Q
sd, what "big" brewery expansion did HOOK just go through? Between their three plants they have capacity around 800K Bbls, that is about the same as SAM's small Ohio plant. How much extra capacity are you talking about? The economies of scale are completely different. Plus INBEV's distribution fee's kill the margins.
DDRX has demonstrated very rapid sales growth, HOOK and SAM have not.
Here's the quarter over year ago quarter sales growth rates for all three companies:
DDRX: 77.7%, for the quarter ended 12/9/2009 sales grew from 13.870M$ to 24.650M$ per quarter.
HOOK: 0.7%, for the quarter ended 9/30/2009 sales grew from 31.467M$ to 31.683M$ per quarter.
SAM: 7.5%, for the quarter ended 9/26/2009 sales grew from 101.128M$ to 108.722M$ per quarter.
Baby elephants can grow their weight by 25% per year during the first ten years of their lives.
Are HOOK and SAM still babies?
Well in the two years ending June 2009 DDRX grew revenue from 36 million to 63 million while for HOOK revenue in two years ending 12/08 revenue grew from 35 million to 79 million plus revenue will total 120 million in 2010.....So revenue growth might not explain everything or get ready for another stock going up 100X it's current price.....
safety, once again you ignore the INBEV control via ownership and distribution. This means a buyout can only happen by a company that has no interest in paying a premium for these brands. Do you really believe that someone wants to get in a bidding war for this marginal company with INBEV, when they own over 35% already and control the distribution channel? Don't lie, how is a big buyout premium possible here when INBEV would have to be "bought off" for their national distribution? The numbers don't add up, it's virtually impossible.
DDRX valuation by the stock market was wrong by a multiple of 100X this year....Worth 35.00 to Green Mountain Roasters today traded for .35 cents per share 9 months ago.........Now if DDRX is not a marginal coffee roaster and I believe Green Mountain wants DDRX products to distribute thru Green Mountain distribution system ......funny but Hook trading at .85 cents looks a hell of a lot like DDRX trading at .36 cents .....DDRX hit 4.00 and kept going Higher ....