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Another potential earnings short-squeeze candidate in the alcoholic beverages complex is
Boston Beer(SAM - Get Report), which is set to release numbers on Wednesday after the market close. This company is a craft brewer in the United States. Wall Street analysts, on average, expect Boston Beer to report revenue of $112.13 million on earnings of 40 cents per share.
Recently, Auriga said it's maintaining its buy rating on the stock and its $100 price target. The firm said it expects Boston Beer to benefit from continued growth of its seasonal beers as well as that from Twisted Tea, which is being rolled out to new markets this year. Auriga also cautioned that this quarter will likely see higher component costs and higher shipping costs.
The current short interest as a percentage of the float for Boston Beer is extremely high at 34.5%. That means that out of the 8.22 million shares in the tradable float, 2.87 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.6%, or by about 73,000 shares. The bears could be in for a world of hurt if Boston Beer can crush estimates and raise forward guidance, since the stock has such a low float and high short interest.
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From a technical perspective, SAM is currently trading above both its 50-day and 200-day
moving averages, which is bullish. This stock ripped back above its 50-day moving average of $101.20 a share on Monday on above average volume. That move has now pushed the stock within range of triggering a major breakout post-earnings, if the company can deliver what the bulls are looking for.
If you like the look of SAM here, then I would wait until after they report and look for long-biased trades if this stock can trigger a break out above some near-term overhead resistance at $107.18 to $108.16 a share with high-volume. Look for volume on that move that clocks in close to or above its three-month average action of 115,757 shares. If we get that move, then SAM can easily skyrocket above its December high of $115.49 since it will be trading in all-time high territory.
I would avoid SAM or look for short-biased trades if the stock fails to trigger that breakout, and then drops back below its 50-day moving average of $101.20 and then below some near-term support at $97.47 a share with high-volume. Target a fall back towards its 200-day moving average of $94.27 a share or possibly much lower if the bears spark a big selloff post-earnings.