Bes Stocks To Buy 2014, Best Stocks For 2014: Small-Cap Breweries Can Quench Your Profits For Thirst

Monday, March 19, 2012

Small-Cap Breweries Can Quench Your Profits For Thirst

The beer industry pumps nearly $200 billion annually to the U.S. economy. Plus, the National Beer Wholesalers Association (NBWA) shows that the industry provides nearly 1.9 million jobs--generating nearly $62 billion in wages and benefits.

Well, I'll drink to that, and apparently so will a whole bunch of people in Nevada. It's the number one beer-consuming state at 44 gallons per year.

With those types of numbers being generated, and the fact that summer is rapidly approaching, I thought it would be a good idea to explore some investment opportunities in the beer industry.

The trio of small-cap stocks I'm about to talk about does not resemble a Molson Coors Brewing Company (NYSE: TAP) or Anheuser-Busch (NYSE: BUD). Each are unique and capable of quenching your thirst for profits.

Craft Brewers Alliance (NASDAQ: HOOK), headquartered in Portland, Oregon is a leading brewer of handcrafted beers in the United States.

It is the result of a 2008 merger of two of the country's original craft breweries, Widmer Brothers Brewing Company and Redhook Ale Brewery, Incorporated. Following the merger, Redhook was renamed Craft Brewers Alliance, Inc.

According to a Wall Street Journal article, insiders at Craft Brewers Alliance have been buying the company's stock now that it is recovering from post-merger lows.

The faltering economy, slowed growth in the high-end beer business, higher raw material prices and the company's own slowed growth have weighed on the company's share price, which reached an intra-day low of $.85 cents a share in March.

With a name inspired by a daredevil kiteboarding trick, Slim Chance Light Ale is a craft beer "for guys with an active lifestyle and an appetite for adventure." The folks at HOOK say it's the beer you want to drink after a hard run, a day on the slopes or a long bike ride, but it's also great for when you're just hanging out in the backyard.

Although Boston Beer Co Inc. (NASDAQ: SAM) year ago quart! er resul ts suffered as a result of charges related to the recall of select bottles of Samuel Adams beer (SAM.N), it backs its 2009 profit outlook.

For the quarter ended March 28, the company posted a profit of $1.4 million, or $.10 cents a share, compared with a loss of $3.7 million, or $.27 cents a share, a year ago. Revenue rose 7 percent to $81.1 million.

The company reaffirmed its 2009 earnings outlook of $1.40 a share to $1.70. Analysts on average were looking for a profit of $1.49 a share, according to Reuters Estimates.

Founder and brewer, Jim Koch, brews Samuel Adams beers with 18 distinctive, award-winning styles of beer. The brewery has won more awards in international beer-tasting competitions in the last five years than any other brewery in the world. Samuel Adams is an independent brewery and has half of a percent of the domestic beer market.

Drinks Americas (DKAM.OB) plans to roll out Kid Rock Bad Ass Beer this year, and the company claims there have been 8 million web hits on the brew and it hasn't even reached store shelves yet.

The company's main goal is to hitch their wagons to the stars.

Born in 2004, the company has a stable of beverages it markets, including Donald Trump's Trump Super Premium Vodka and Willie Nelson's Old Whiskey River Bourbon.

Willie Nelson's bourbon continues to be a strong seller and the Trump vodka has remained in the market when many others have failed. Drinks Americas also completed the acquisition of Olifant USA in January. The Dutch-made Vodka immediately added about $1.5 million in revenues

The stock has been trading in pennies for more than 52 weeks (currently at $.14) and its financial reports show net losses. The company reported a net loss of income of $6.3 million for the fiscal year that ended April 30, 2008. In 2006, during the same period, the company reported a net loss of $5.8 million.

The company is gaining in sales, though, up more than 180% in the three years. It's not uncommon for a young company to! experie nce several years of losses while in the building stages. Remember how long it took Amazon.com to finally turn a profit?

I rest my case .... and "Cheers!"

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