12 Best Brewery Stocks to Buy According to Hedge Funds

6. The Boston Beer Company, Inc. (NYSE:SAM)

Number of Hedge Fund Holders: 28

Ranking at number 6 in our list of the Best Alcohol Stocks to Buy Now is The Boston Beer Company, Inc. (NYSE:SAM), one of the largest American-owned brewing companies, best known for its flagship brands such as Samuel Adams and Truly Hard Seltzer.

Although it was among the pioneers of America’s craft brewing revolution, The Boston Beer Company, Inc. (NYSE:SAM) isn’t the small business it once was. The company declared in its Q3 2024 earnings call transcript that it had generated over $200 million in operating cash flow YTD and maintained a cash balance of $256 million at the end of the third quarter with no debt, a rarity among the massive global beer conglomerates. To return value to its shareholders, BBC has repurchased $191 million in shares this year by the end of Q3 and recently even expanded its share repurchase authorization by $400 million, bringing the total repurchase agreement to $1.6 billion.

However, The Boston Beer Company, Inc. (NYSE:SAM)’s core brands have not been doing so well lately. The company’s iconic Samuel Adams beer has seen its sales sliding for almost a decade now. The Truly Hard Seltzer brand was also down around 23% YTD through Oct. 6, according to scan data for off-premise sales by market research firm Circana. The beer-maker’s $300 million investment in Dogfish Head Brewery doesn’t seem to be going according to plan either and it has already written down around $85 million of the floundering Delaware firm, including an impairment charge of $41.2 million in the last quarter.

That said, The Boston Beer Company, Inc. (NYSE:SAM)’s key success factors include its ability to innovate, enhance supply chain efficiencies, and allocate resources strategically. As the craft beer market continues its decline, the company is focused on diversifying its portfolio of products by including flavored malt and hard seltzers, among others. BBC also recently launched a distinctly American light craft lager called Samuel Adams American Light, to make sure it keeps up with the ongoing no-lo trend. The company also continues to dominate the hard tea category and its Twisted Tea Brand enjoys a strong 85% market share, with the most successful competitive brand limited to a low single-digit share in the market.

SouthernSun Asset Management LLC stated the following about The Boston Beer Company, Inc. (NYSE:SAM) in its Q1 2024 investment letter:

“In the near term, we believe the company will remain focused on sustaining Twisted Tea’s growth, turning Truly volume trends, improving operations to enhance gross margins, and thus providing more funds to invest in its core assets as a company – its brands and its sales force. Overall, we remain confident management’s efforts and investments are likely to produce profitable growth that will reward investors over time.”