Boston Beer's CEO Is Selling. Should You Care?

A Fool takes a look at the record to help you better understand insider buying and selling.

Jan 31, 2014 at 6:40PM

Boston Beer (NYSE:SAM) chief executive Martin Roper has a near-zero stock position in the company he helps lead. In the following video, Fool contributor Tim Beyers explains why that might not matter.

First, let's dig into the numbers. Roper, who's been with Boston Beer since 1994, holds just 1,030 shares as of this writing. He has also just cashed in 50,000 shares at more than $200 apiece. A better than $10 million payout amassed in a matter of days. That's not uncommon for a CEO, per se, especially when you consider that Roper has been running point alongside founder Jim Koch since 2001, when he became CEO. As an investor, should you care that he's selling?

You might if you didn't know the context, and here, context is everything. Roper didn't just sell 50,000 shares; he exercised options to buy Boston Beer stock between $140 and $148 a share, and then sold at market prices. In doing so, he was abiding by the strictures of a previously filed 10b5-1 programmed trading plan. Roper had no control over the timing or pricing of the sales. He also still holds more than 30,000 options to buy Boston Beer shares.

Meanwhile, the most important insider -- Koch -- still owns more than 32% of the shares outstanding. He's also chairman of the board, and as such, remains engaged in the business. All good signs, Tim says.

Now it's your turn to weigh in. Does Roper's selling bother you? Please watch the video to get Tim's full take and then leave a comment to let us know whether you would buy, sell, or short Boston Beer stock at current prices.

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Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends and owns shares of Boston Beer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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