Boston Beer Co Inc (SAM), Craft Brew Alliance Inc (BREW): Capitalizing on the Light-Beer Demise

BEAM Inc (NYSE:BEAM) saw some of its major brands deliver impressive results, with Maker’s Mark comparable-net sales growing 44% and Skinnygirl growing 140%. Beam also has the size and strength to carryout strategic acquisitions and these can further contribute to the company’s financial performance.

The company generated $378 million of operating cash flow in 2012 and has $366 million of cash on the books. This position will allow it to carryout additional acquisitions, like the recent purchase of Pinnacle Vodka that helped drive revenue growth in first quarter 2013.

Bottoms up

As consumer preferences continue to move away from the traditional beer segment, these three companies are ready to capitalize. Boston Beer Co Inc (NYSE:SAM) has been a high flyer, and while I have been critical of the high P/E ratio in the past, the company continues to beat estimates. At a P/E of 44, the stock is pricing in quite a bit of growth, but the company has been delivering.

Craft Brew Alliance Inc (NASDAQ:BREW) is a riskier play given its small size. However, with ambitious expansion plans, the stock could prove a major winner for the long-term investor willing to give the company the time to develop.

BEAM Inc (NYSE:BEAM) is a well established player with a strong brand portfolio that will allow for continued success. The company trades above the industry average P/E at 24.3, but it is still well below its historic five-year average P/E of 36.5. The company also offers a small dividend yield of 1.4%. Any one of these companies can be a great addition to your portfolio if you believe consumer tastes will continue to change.

John Timmes has no position in any stocks mentioned. The Motley Fool recommends Beam and Boston Beer. The Motley Fool owns shares of Boston Beer.

The article Capitalizing on the Light-Beer Demise originally appeared on Fool.com.

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