Boston Beer Co Inc (SAM): Should You Buy?

Craft Brew Alliance Inc (NASDAQ:BREW) has even added Omission Beer, a gluten-free offering that looks to tap into the $4 billion and soaring market for gluten-free consumer goods. Brand innovation and quality products justify another high P/E of almost 60 in this venturing company. Shipments were down in the first quarter, resulting in a sharp share price decline, but many beer companies had have the same issue recently.

More promising than the quarterly earnings is the future prospects of partnerships. Craft Brew Alliance Inc (NASDAQ:BREW) brand Red Hook has collaborated with Buffalo Wild Wings (NASDAQ:BWLD) on a new beer, “Game Changer Ale,” that will be offered in all 900 of the restaurant locations. Heavy investments are necessary for this type of operation, but the nationwide brand exposure for Craft Brewers Alliance is invaluable. Boston Beer Co Inc (NYSE:SAM) encourages craft brews to keep chipping away at the big boys. Teaming up is a great strategy to get that investment behind the bar.

Beer bandwagon?

Morningstar analysts expect Boston Beer Co Inc (NYSE:SAM) to double down and grab 2% of the US beer market. This projection justifies the expensive share price, but more important is the absence of debt. The micro breweries just starting to hit the big time have to incur high costs to get their names out there, but those are days of the past for Boston Beer. As a result, the risk for investors has been lowered substantially. If the company can gradually get its free cash flow of $29 million back to healthier levels of previous years, you might want to join the beer aficionados for a drink.

Kyle Vaughan has no position in any stocks mentioned. The Motley Fool recommends Boston Beer. The Motley Fool owns shares of Boston Beer.

The article Stock Up on Boston Beer and More originally appeared on Fool.com.

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