The spirits industry is one of the most consistent performers in the economy. No matter what’s going on, people will keep watching it over a drink. As volatility starts to rear back up ahead of a potential pandemic second wave and the upheaval set to accompany probably the most polarizing election in US history, one thing is guaranteed: the cocktails will be flowing strong.
For investors seeking some cover in front of what may be a period of heightened volatility and uncertainty, rotation into stocks positioned to deliver on this theme may become increasingly popular.
With that in mind, we take a look at a few stocks poised and ready to be on the receiving end of those flows, including: Boston Beer Company Inc. (NYSE: SAM), Splash Beverage Group Inc. (OTC PINK: SBEV), and Molson Coors Beverage Co (NYSE: TAP).
Boston Beer Company Inc. (NYSE: SAM) is a staple in the space and a stock that continues to act very well. The company produces and sells alcohol beverages primarily in the United States. The company’s flagship beer is Samuel Adams Boston Lager. It offers various beers, hard ciders, and hard seltzers under the Samuel Adams, Twisted Tea, Truly Hard Seltzer, Angry Orchard, Dogfish Head, Angel City, Coney Island, Concrete Beach, Wild Leaf, and Tura brand names.
The company markets and sells its products to a network of approximately 400 wholesalers in the United States, as well as international wholesalers, importers, or other agencies that in turn sell to retailers, such as grocery stores, club stores, convenience stores, liquor stores, bars, restaurants, stadiums, and other retail outlets. It also sells in products in Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America.
Boston Beer Company Inc. (NYSE: SAM) most recently reported second quarter 2020 net revenue of $452.1 million, an increase of $133.7 million or 42.0%, from the same period last year. Net income for the second quarter was $60.1 million, an increase of $32.3 million or 116% from the same period last year. Earnings per diluted share were $4.88, an increase of $2.52 per diluted share from the second quarter of 2019. This increase was primarily due to increased revenue driven by shipment growth of 39.8%, partially offset by lower gross margins and increases in operating expenses.
According to the release, net revenue for the 26-week period ended June 27, 2020 was $782.7 million, an increase of $212.6 million, or 37.3%, from the comparable 26-week period in 2019. Earnings per diluted share for the 26-week period ended June 27, 2020 were $6.37, an increase of $1.99 per diluted share or 45.4% from the comparable 26-week period in 2019.
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. SAM shares have been relatively flat over the past month of action, with very little net movement during that period.
Boston Beer Company Inc. (NYSE: SAM) pulled in sales of $452.1M in its last reported quarterly financials, representing top line growth of 42%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($86.7M against $219.8M, respectively).
Splash Beverage Group Inc. (OTC PINK: SBEV) specializes in manufacturing, distribution, sales & marketing of various beverages across multiple channels. SBEV operates in both the non-alcoholic and alcoholic beverage segments which they believe leverages efficiencies and dilutes risk.
SBEV believes its business model is unique as it ONLY develops/accelerates brands it perceives to have highly visible pre-existing brand awareness or pure category innovation.
Splash Beverage Group Inc. (OTC PINK: SBEV) recently announced the launch of Qplash.com, the Company’s online retailer catering to consumers and businesses alike in the CPG (consumer packaged goods) space with a primary focus on beverages.
“COVID-19 has changed the way products are bought and sold around the world; increasingly buyers are turning away from brick and mortar and choosing ‘low touch’ options such as online shopping and delivery”, according to Robert Nistico, CEO of Splash Beverage Group. “We want to be ahead of that trend, with distribution options to fit all of our customers in the newly evolving economy.”
Total U.S. e-commerce is already valued at over $435 billion, and its growth trajectory shows no signs of slowing. Specific to the CPG industry, online sales currently account for over $70 billion.
And the stock has been acting well over recent days, up something like 6% in that time.
Splash Beverage Group Inc. (OTC PINK: SBEV) estimates the Company will have net sales between $750,000 to $1,000,000 for the 13-week third quarter ended September 30, 2020. This would represent significant sequential quarterly growth. The company posted sales of just over $600k in its prior quarter ended June 30.
Molson Coors Beverage Co (NYSE: TAP) is a key player in the alcoholic beverage space. The company sells various products under the Blue Moon, Coors Banquet, Coors Light, Miller Genuine Draft, Miller Lite, Hamm’s, Icehouse, Keystone, Mickey’s, Miller64, Miller High Life, Milwaukee’s Best, Olde English, Steel Reserve, Hop Valley, Leinenkugel’s, Peroni Nastro Azurro, Pilsner Urquell, Revolver, Saint Archer, Sol, Terrapin, Crispin, Smith & Forge, Arnold Palmer Spiked, Cape Line, Henry’s Hard, Redd’s, and Steel Reserve Alloy Series brands.
It also offers various brands, such as Belgian Moon, Coors Original, Aquarelle, Carling, Carling Black Label, Coors Edge, Coors Slice, Exel, Mad Jack, Molson Canadian, Molson Dry, Molson Export, Molson Ultra, Old Style Pilsner, Rickard’s, Brasseurs de MontrÃ©al, Creemore Springs, Granville Island, Le Trou du Diable, Heineken, Heineken 0.0, Strongbow cider, Dos Equis, and Moretti. In addition, the company provides its products under the Staropramen, Bergenbier, Borsodi, Jelen, Kamenitza, Niksicko, Ozujsko, Aspall Cider, Bavaria, Beck’s, Branik, Cobra, Corona Extra, Lowenbrau, Pardubicky Pivovar, Rekorderlig cider, Sharp’s Doom Bar, and Stella Artois brand names.
Molson Coors Beverage Co (NYSE: TAP) just announced that it has entered into an exclusive agreement with The Coca-Cola Company to manufacture, market, and distribute Topo Chico Hard Seltzer in the U.S., taking another big step in its plan to aggressively grow the company’s above premium portfolio and become a major competitor in the fast-growing hard seltzer segment.
“Building on the incredibly successful launches of Vizzy and Coors Seltzer earlier this year, we are thrilled that Molson Coors will launch Topo Chico Hard Seltzer in 2021,” said Gavin Hattersley, CEO of Molson Coors. “This is another significant step in growing our above premium portfolio and becoming a major competitor in the rapidly-growing hard seltzer segment, both key components of our revitalization plan.”
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things.
Molson Coors Beverage Co (NYSE: TAP) pulled in sales of $2.5B in its last reported quarterly financials, representing top line growth of -15.1%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($780.8M against $3.8B, respectively).