It has been nearly 30 days since we last wrote about one of our favorite stocks this year, Boston Beer (SAM). Last time we wrote, the stock was under pressure from a downgrade, yet we said it would continue to move higher. As we write this, the stock is trading at $163.38 up over $8 since our piece, and set to test $170 in short order.
We continue to think the analysts have the stock wrong, and haven't given credit to possible catalysts on the horizon, as well as selling short the American Beer drinker. Sam in a Can's debut is expected to be in the summer, and we have yet to hear any news from the company on that front since the original release. There has also been more talk of a revision to the Craft Beer tax, that could be a huge benefit to Boston Beer (SAM).
Bears continue to look at Boston Beer (SAM) and think its an easy short, and they may have a valid case using fundamentals. But if making money on stocks was as easy as looking at P/E ratios, everyone would be rich. Adding to the Bear case is the recent spat of insider selling. Do the directors get paid to return shareholder value or do they get paid to value the company? Again, flawed Bear arguments. See LinkedIn(LNKD) for a quick reference on that topic.
Time will tell whether our Bull thesis is proved correct, but we think the time for Boston Beer (SAM) to head to $170 is near, as pointed out on the chart below.
We currently hold April 170/180 calls and will look to add or decrease our position in the next 72 hours.