Boston Beer Company

Rating: Excellent Buy Price: $385 Sell Price: $835 The Boston Beer Company makes beer and other alcoholic beverages under the brands Samuel Adams, Dogfish Head, Truly Hard Seltzer, Angry Orchard Cider, and Twisted Tea. The business is one of the largest independent craft breweries, with top craft beer brands and the second largest Hard Seltzer brand. The company has consistently grown by over 10% for over a decade and has always maintained a solid balance sheet that they have leveraged effectively to grow the business. The company’s stock has slid from all-time highs in the past year due to the slowdown in the overall hard seltzer market. As a result, analysts’ projections of 100+% growth in the Truly brand have slowed to 10-20%. The company was also caught by this dip in the overall seltzer market, causing a build-up in inventory to be written off at the end of 2021, according to the best investing websites on the market. The overall company has multiple products and strategies that can contribute to continued strong growth, and the price has dropped to the point where it creates a “tails I win head I don’t lose” proposition. Downside Rating: Limited The critical risk in the business is that the management team didn’t learn its lesson from building too much inventory that needed to be destroyed. The leadership team has discussed the learning opportunities they’ve had during this time, and they are implementing a more dynamic production process. Still, this issue could always repeat itself in a market that is difficult to project. However, even if that happens again, the rest of the business should be resilient enough to minimize losses. The Dogfish Head brand and Samuel Adams brand are resilient and strong brands within the craft beer market. Those two core brands provide a baseline for future financial performance. Their strong balance sheet will allow the company to continue investing in the business even if Truly’s performance does not live up to everyone’s hopes. It reflected on its stock price in Excel. Upside Rating: Excellent Beyond creating a powerful Hard Seltzer brand that is still well-positioned for robust growth even in a slowing market, there are several avenues to growth for the company: The company has invested heavily in expanding and automating in-house production, which should lead to significantly improved margins and allow the company to scale up/down production more effectively. Its ready-to-drink alcoholic products are well-positioned for a market that many see as the next wave in the alcoholic beverage industry. They’ve partnered with Beam Suntory to create lines of ready-to-drink alcoholic beverages using the Truly brand and Beam Suntory’s Sauza tequila brand. The Dogfish Head canned cocktails line, using Dogfish Spirits, is also well-positioned for growth. The company’s partnership with Pepsi is launching Mountain Dew alcoholic beverages. Yet another strong brand for growth in the beyond beer category. Twisted Tea brand has started to show strong growth in the beyond beer category. It has the potential to be an overnight success two decades in the making as the company continues to position the brand well. Growth within the company’s core beer brands, Dogfish and Samuel Adams, is solid and well-positioned within a competitive craft beer market. We can clearly see that in its stock price in Excel. Dogfish’s partnerships with outside brands, now including Patagonia, create new opportunities for consumers to find and fall in love with the brand. Dogfish’s transition to Boston Beer’s distributer network is complete, positioning the brand for significant growth as it develops relationships with its expanded network. The company’s balance sheet and reputation also position it to be a buyer of choice for quality craft beer brands as founders age and start to think about how to exit their business. Continuing and expanding the stock repurchase program as cash flow returns to normal levels, creating solid per-share value growth for stockholders. More SEC filings of Boston Beer can be found in: Apple 10K Tesla 10K Netflix 10K Microsoft 10K Amazon 10K Google 10K Apple 10Q Tesla 10Q Netflix 10Q Microsoft 10Q Amazon 10Q Google 10Q