December 15, 2010
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Boston Beer (NYSE: SAM ) bubbled as high as 14% in intraday trading Wednesday after the brewer of Samuel Adams raised its full-year 2010 earnings guidance and offered a stronger-than-expected forecast for next year, as well.
So what: Citing a 12% increase in beer shipments over 2009 levels, Boston Beer said it now expects 2010 earnings to range between $3.30 and $3.60 per share, up from its previous forecast of $2.85 to $3.15. More importantly, management felt confident enough in the current tailwinds to offer an initial profit estimate of $3.95 per share for 2011, versus the average analyst estimate of $3.53.
Now what: I'd wait for the shares to flatten out a bit before taking another swing. Fueled by the powerful trend toward craft beer, Boston Beer's shares are up about 120% over the past year and now trade at a forward P/E of 24. While Boston Beer's growth prospects are certainly tasty, cost leaders like Anheuser-Busch (NYSE: BUD ) and Molson Coors (NYSE: TAP ) -- which can still get aggressive on price -- might offer Fools the better value today.
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