I called investor relations last year with some great advice to turn this ship around. She all but hung up on me and didn't give 2 hoots of what I had to say. When SAM starts listening to its customers and investors things should start to turn around quickly. BTW have been long since 1997
The problem with Sam's incessant buying back of shares on the open market the past 3 years is it cannot mask reality of falling sales in an overcrowded market of microbreweries in the US. Here is what Sam earned and what it spent in stock buybacks the past 2 years: (THis is from their 2015 and 2016 Annual Reports) Year Net Profits Shares bot Avg Price $ Spent Total Loss based on current $131/shr Price 2015 $98.4 Mill 617,274 $224.77 $138.7 Mill ($57.8 Mill) 2016 $87.3 Mill 948,117 $170.89 $162 Mill. ($37.8 Mill) 2017* $5.7 Mill + 283,000 $153.00 $43.3 Mill. ($6.2 Mill)
(*2017 is from their 1st Qtr 2017 Earnings report - Earnings thru 3/31, but stock purchases thru 4/17) So their Net Profits for the 2 years and 1 Qtr were $191 Mill, but they spent $344 Mill buying back stock at very high prices. Goldman Sachs downgraded Sam due to falling beer sales, (falling demand). They didn't mention growing supply (6,500 microbreweries in the US and growing). In college, my micro-economics professor taught us that lower demand and higher supply meant declining profits. He didn't mention anything about a company spending all its cash on inflated stock, but I don't think it is wise.
I'm going to try and help SAM with a new idea. That idea is to come out with a awesome IPA that celebrates old iron side. Put a picture of the ship on the label. Once the label is done come up with an awesome IPA. Rebel doesn't even come close. The IPA has to be awesome. Dogfish 90 minute or Captian's daughter are 2 good IPA's to try and beat.
Even our national SAM can't drink our way out of this one. Fine 🍷 can't age
Boston Beer Co Inc NYSE $SAM Correlation Histogram
X axis : Stocks Price Correlation Coefficient Y axis : Quantity of stocks Sep-2016 1,000 Day Parameter 4,338 NYSE Stocks Price Analysis This stock mode of correlation coefficient is 0.2 In other words, the correlation coefficient of the other stocks
Good news longs. Was at a cook out and one of the "millennial" guest was drinking Truly Spiked and Sparkling.
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Boston Beer needs to freshen things up a little. How about a new label? How about using Boston Beer on the label with a picture of ship? How about coming up with a good IPA and selling it in a 4 pack like Dogfish for 9.99. I mean a good IPA and not the re-introduced Rebel.
Fellars, it won't be long befer SAM puts out its Octoberfest beers. Last year I was disappointed in the Octoberfest sampler and would rather drink the basic Boston Lager...........some friends feel the same. Still think it will crack $120 by Labor Day per my last post. Was in Illinois last week and what a dysfunctional place..........yet I could buy some decent tasting beer at $15/case and gasoline was $1.96/gallon and no highway work sites to slow travel (Ill.DOT told contractors to shutdown worksites cause they can't pay the bills with no budget). Ahhh yes, dysfunctional is good!!!!
What does everyone think of the re-introduced Rebel IPA? Personally I was disappointed. SAM should have sampled Dogfish 90 minute and Captains Daughter IPA before coming up with this stuff. Seriously these guys need to shake things up and get the brewers working on coming up with some good IPA. Rebel Roiser isn't bad IMHO. BTW I'm long SAM and its been painfull.
Couple of things to ponder....company stock buy back has came to a halt......shorts still hold roughly 26% of float....could be company sees scenario developing with heavy shorts & a much better than expected product depletions in upcoming earnings report that will wash out the heavy short & allow stock to rebound. Big brewers think they will be able to bully beer drinkers into their way of thinking.....won't happen....there are sacred loyalties to products & why they exist....this one is the one that endures. Koch has some pride & believes in his vision.....appreciate this is a true craft! Eliminate the unfair trade practice of distributors controlling shelf space & things look much different.
Rick: I believe you're a tad on the low side...........many months befer I said the $150 mark would go down and right now with all the competition I suspect we could se $120 by Labor Day......stayin' on the sidelines.
SAM should be trading max $90, company is shrinking, using S&P mutilple on $5 earnings gets $90 and should be a discount, only reason stock is here is because they are buying it back themselves
Yahoo Finance Insights
SAM reached a new 52 Week Low at 133.60
Why was Mr. Roper's salary in 2016 $23,392,000? Why did the Board of Directors grant Mr. Roper 575,507 options in 2016? Why is Mr. Roper leaving the company? Why do ALL of the Directors and Executives of SAM sell all of their stock? Why are Directors making $145,000 each for attending 4 board meetings a year? Why has SAM spent all their cash on buying back stock in the open market? Why are sales down 14% year over year? Why do people buy SAM at $143/ share?