Swami, I wish you and those who buy BREW at a PE of 250+ good luck. I also recall SAM trading for a PE of 51 at $44, and I also recall the ability to buy at half price about a year or so after. I'm going to keep my powder dry for such a time for now.
I also would not buy BREW because small fry share owners are second in line behind BUD in terms of sweetheart deals. Why BREW would sell its crown jewel, Goose Island, to BUD is beyond me. (And no, please don't tell me about Kona while I am drinking, or rather savoring, a Goose Island Green Line IPA).
Good luck, Hooper. I am also hoping to get back in (at reasonable prices), and I plan not to be foolish enough to sell my shares again if I do get back in.
So you sold at ~$160, and are now buying back in in the mid-$200s?
I will assume that your spring sale was at a profit, so you are also out CG taxes, which you will have to cough up in a few months unless this is in an IRA.
In my opinion, you are only enriching your broker and the IRS with your investment strategy. Most people prefer to buy low, sell high, not the other way around.
I am also out (foolishly sold calls that have since ben exercised), but I have not been buying back in at current prices. I would be seriously worried about getting whip sawed, selling at $160 (which is still expensive by SAM standards at ~30 PE), then buying back at between $230-240, which could quickly revert to $125 if the PE returns to historic levels of ~25 for a nicely growing company with minimal/no debt. Be wary of exorbitant PEs, especially for a company that continually, if slowly, dilutes existing share owners with excessive stock grants to their execs. Note that the company has not bought back any shares in the last few quarters. Keeping powder dry for other expansion projects? Perhaps. But perhaps they also believe that current prices are too high, and that it would be a poor use of capital.
I agree that the prospects for SAM are good, in fact great, for the future, but that is not the same as being a good investment. Buyers at todays prices simply can not expect any reasonable (or in fact, any positive) return for at least several years. Do they really believe that the price will double again within a year or two, which requires other people (greater fools?) to pay a PE of 100+? At current growth rates, with probable additional dilution, it will require 5 years for the current stock price (or the peak at $260) to reflect a reasonable PE.
If you ever get your 354 shares back, I would suggest just hanging on and quit trying to outsmart the market. Investing is sort of like golf in that success seems to be inversely proportional to effort. Now I just need to learn that.
Down $15, still at crack smoking high PE of 46 if they earn $5/share next year.
Hint: SAM has not repurchased any shares during the last 2 quarters. I expect they are keeping their powder dry for lower prices. So am I. We both might be waiting for a long time....
Also, I agree with your assessment of BREW. Their 800 PE makes SAM look positively cheep by comparison.
I rate it another good quarter. Not sure if justifies a PE of 50.
Also noted no buy-back activity for 2nd quarter running, but I'm sort of glad Koch isn't blowing company money at these prices. My guess is that buy back might resume with a PE back in the normal range of 25-28x. The have enough good uses for cash flow to invest in their business. That is about when I look to buy back in. (It may be a LONG time).
Dilution from options/stock grants worked out to about 3.5% based on difference from last year (Q3-Q3), but there was some buyback during that time. That means next year could be 6% dilution..
We will all know 8 days from now.
I would be nervous if I had bought in anywhere near todays prices with 50-55+ PE.
Yesterday's and today's significant downward moves with high volume might not look good for longs. Look out below when the late arrivers decide to protect their profits or minimize their losses. Great company or not, a 50+ PE entails more risk, especially if their sales and earnings announced next week don't just exceed estimates, but knock the cover off of the ball.
I agree with bbdott about the remote possibility and futility of a stock split, especially at a high PE like this. The last thing they want is to split an expensive stock and have it correct to a small price
A PE of 55 will eventually act like a load stone around the neck of this stock.
Still waiting patiently.
OK, diddly squat. I'm not sure how you got your tampon in sideways, but enjoy your BREW stock and Kona beer. I have never had a Kona, but I do like Goose Island, especially their IPA. Call me in a few years when you have enjoyed your probable financial haircut. Life is too short to flame everyone who happens to question your investment thesis.
Example: bbdott (whom I have never met) and I frequently exchange our thoughts on SAM, a company that we both like, and we also probably both like its products. I do not quite agree with his investment thesis, but I am perfectly happy to have a civil discussion, and perhaps someday, we can hoist a tankard of our favorite SAM beverage together.
So, may peace be with you, and may you make a fortune with BREW. I will choose a different path, but to the diminishing extent that America remains a free country, the market is big enough for all of us to prosper, and I hope that we all do. Economics is not a zero sum game.
BUD does not need to buy BREW. They already appear to enjoy an insider deal. Why else would BREW have sold what was in my opinion their crown jewel: Goose Island, to BUD? I decided not to buy BREW on that basis (potentially a mistake in retrospect). We'll see in 10 years or so.
I tend to agree with bbdott that SAM is a much better business, even at its current crack smoking 53 PE. (Still waiting to buy back in at more favorable prices when the market corrects a bit). BREW's PE near 800, large debt to equity, high price to sales, and minority shareholder (BUD) that gets to cherry pick BREW's assets are not something that I want to invest in.
I'm not much of a tea leaf reader, but XOM has a nice flag developing with 95 high (12/24/2007 & 7/22/2013) and a series of higher lows that are converging on 95. This same thing happened to MMM in January when it broke out over 95 and never looked back. My guess: break out in Q1/14.
I noticed the same thing. One wonders where all of these guys (and their money) come from. My guess is that it is a net of slain shorts covering offset by new fools stepping over the bodies of the previous shorts. Not a game I want to play. I'm just a spectator at this point.
SAM's Dark Depths Baltic IPA is the best beer I have ever tasted. I'm always looking for the Hopology IPA 12 pack sampler so that I can get my 2 bottles of Dark Depths.
Love the company, love their products even more, and am looking forward to owning shares again when the price comes back down to earth.
I'm no tea leaf reader, but this has the look of a head and shoulders top, so look out below when it rolls over. PE of 50 is priced way beyond perfection, so earnings at the end of the month NEED to be a slam dunk, and then some. Any reasonable/historic PE will require a fairly massive correction. I am keeping my powder dry since being called out of my shares in August, looking to buy back in at favorable prices.
PS: STILL have not seen any SAM cans.
I agree about stock splits, especially now that there is less of an issue with even 100 share lots. One of my major investing mistakes was ignoring what I considered to be a warning sign of corporate foolishness when CPKI California Pizza Kitchen did a 3:2 split when the share price was $30! Six months later, previously growing earnings missed, debt increased from what had been zero, and the stock crashed 50%. Six months after that, the company sold out to PE, and I ended up with a 35% haircut.
Thanks for your answer to my previous post. I agree that there has probably been a slow motion short squeeze going on since at least the Dec pop. I'm surprised that people are either able to stay solvent or willing to get in front of this freight train. Quite interesting that you report short interest increased! The market can generally remain irrational longer than people can remain solvent, so I would not be tempted to entertain the unlimited risk of shorting ANYTHING, even if my opinion is that prices are much too high.
As I reminded my students when teaching, "patience, Lotus Blossom". Impatience with money generally results in loosing that money.
Interesting that trading volume over the last three days has been significantly higher than normal, with large down tick trades early in the AM, and downward price movement.
I'm not much of a tea leaf reader, but the predominant volume trend has been very light ever decreasing volume as the price rose, and this is in significant contrast.
Perhaps someone that knows better could enlighten me. I'm out now, but would like to get back in at better prices.