OK. I admit it. I love companies gushing cash. Show me the money!
The CEO at Boston Beer Company
Skeptics will say, "Hey, Warren Buffett, CEO of Berkshire Hathaway
Last night, the company reported that first-quarter net revenue, compared with last year's comparable quarter, increased 9.1% -- driven by a 6.5% increase in volume (who was that talking about flat sales?) and a 2.5% price and package-mix-related increase (ah, firm growth and firm pricing too). Oh, and the quarter's $53.6 million in sales is dwarfed by that $62.4 million parked in the bank.
Net income shot up $2.7 million over what was earned in last year's first quarter -- that's a whopping (or is that frothy?) 212% increase. While $1.7 million of that gain is related to a reduction in advertising spending, that's still money on the bottom line.
The company reconfirmed that it expects earnings per share to increase from $0.86 in 2004 to $0.94 to $1.00 in 2005 (that's a jump of 9.3% to 16.3%). The stock is currently priced at roughly 19 times estimated 2006 earnings.
For comparison, Anheuser-Busch stock currently sports a P/E of 16 times estimated 2006 earnings (and its U.S. beer volume fell 2.7% in the latest quarter). Molson Coors Brewing
Don't venture too close to the hot wine market if gobs of debt bother you. Constellation Brands
Boston Beer, besides being based close to the current Super Bowl and World Series champions, is a champion in its own right. It has mastered the art of organic growth that puts money in the bank. That success has caused its stock to be priced higher than its peers, but that premium is justified as long as the company continues to grow at historic rates.
Fool contributor W.D. Crotty owns shares of Berkshire Hathaway. Click here to see The Motley Fool's disclosure policy.