Boston Beer (SAM) Is Today's Perilous Reversal Stock

Trade-Ideas LLC identified Boston Beer (SAM) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Boston Beer

(

SAM

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Boston Beer as such a stock due to the following factors:

  • SAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.9 million.
  • SAM has traded 60,997 shares today.
  • SAM is down 3.7% today.
  • SAM was up 15.4% yesterday.

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More details on SAM:

The Boston Beer Company, Inc. produces and sells alcohol beverages primarily in the United States. The company's flagship beer is Samuel Adams Boston Lager. SAM has a PE ratio of 25. Currently there are no analysts that rate Boston Beer a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Boston Beer has been 150,100 shares per day over the past 30 days. Boston Beer has a market cap of $2.1 billion and is part of the consumer goods sector and food & beverage industry. Shares are down 5.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Boston Beer as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market, BOSTON BEER INC's return on equity exceeds that of both the industry average and the S&P 500.
  • SAM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Looking at the price performance of SAM's shares over the past 12 months, there is not much good news to report: the stock is down 25.99%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has decreased to $42.05 million or 26.39% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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