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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46825  
Subject: Boston Beer (Sam Adams) ticker SAM Date: 10/5/2010 3:43 PM
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Boston Beer looks to be a great growth stock story. Craft beers continue to grow. Sam Adams is the only remaining US owned, publicly traded beer company. They have recently purchased a brewery in Pennsylvania. So most beer is now made in-house rather than by contractors (mostly by Miller in recent years). Meanwhile, the Sam Adams brands are doing quite well.

The stock has been trading over a narrow range at about $67 in recent months, but earnings for the June quarter reported in August were up 36% with improved efficiency and increased volumes. The official earnings estimate for the year is $2.85-3.15. At PE 20 that implies a value of $63/sh. So stock is fully valued for this year.

However, the 36% earnings increased applied to the last 12 mo $2.81/sh earnings gives potential of $3.82/sh over the next 12 mo and a target of $76/sh.

Longer term continued growth potential makes Boston Beer a good long term growth stock. Value Line rates it 1 for timeliness, and gives a current value target of $80/sh. Next earnings report is due in November.

Recommendation: long term accumulate

Disclaimer: I own some.
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