Beer, Burgers, and Wine-What's not to Love?
Happy Fourth of July!
Ok, I'm a little early but given that this year the Independence Day celebration falls on a Sunday and our offices are closed, I need to jump the gun a little bit.
I'm still getting a ton of responses to my articles on electric cars - keep 'em coming. I'll run some more of your comments next week - many are technically oriented and while I love the content, we're going to discuss a lighter subject than energy efficiency today.
In fact, today's subject is a lot lighter - and is especially relevant on a holiday weekend.
That's right - I'm talking about beverages and burgers. With a big
weekend on the immediate horizon, many Americans will be heading out to
the town parade, the BBQ pit, or the beach. And most will enjoy a beer,
burger, and glass of wine.
So let's have a little fun and take a quick look at three small cap stocks that make products that you're likely to see, and sample, this weekend. You can actually buy a part of these American companies, and maybe even impress your buddies when you thank them for buying your products!
***Usually on the fourth I like to have a beer or two. And while many consider Budweiser to be the most American of all beers, that brand is now part of the Belgium conglomerate Anheuser-Busch InBev (NYSE: BUD)and has a market cap of over $78 billion. So it fails my criteria, American and small-cap, on both accounts - despite the fact that it has one of the best ticker symbols out there.
Instead, I'll likely reach for a Sam Adams this weekend. The brand is owned by The Boston Beer Co. Inc. (NYSE: SAM), the company that makes the tasty Sam Adams Summer Ale that is a seasonal favorite in many beach communities. What's more, the $903 million market cap company offers those with a sweet tooth such summer delights as Twisted Tea and HardCore Cider.
The Boston Beer Co. offers more than just refreshing alcoholic beverages - the stock has been a strong performer, rising 117 percent over the last year. The company has a record of profitability. With analyst expecting 8 percent revenue growth and 10 percent earnings per share growth in the next year, the stock should continue its steady climb higher.
Check out Boston Beer Co., the company is headquartered in Boston, Massachusetts and while it's not likely to double again in the next year, it is in a sector that tends to prove resilient regardless of what's going on in the economy.
***For our next Independence Day celebration stock we're hopping a jet and heading out to the West Coast. There are plenty of breweries in the Western U.S., but when in wine country, well, I like to drink wine. More specifically, I like Pinot Noirs.
One of my favorites comes from the Willamette Valley of Oregon, and is available through Willamette Valley Vineyards Inc. (Nasdaq: WVVI). It's not the most inexpensive bottle on the shelf, but for a special occasion like celebrating our country's independence from Great Britain it's worth the extra cash.
Willamette Valley Vineyards' stock carries a premium as well right now, trading with a PE of 46. The $17 million market cap company turned in a $0.04 per share loss in the first quarter of 2010 and cited higher costs and lower sales volumes as the leading causes.
The stock is pretty much unchanged over the last year. And given the premium price for its wines I wouldn't expect shareholders to pile into this stock unless the economy really picks up steam. But that doesn't mean you shouldn't pick up a glass of their pinot noir, it has great flavor and will be a hit with your wine loving friends.
Put the stock on your radar for a possible future position if and when it looks like the economy gains traction.
***My final celebration stock is actually not a beverage company, but is almost guaranteed to have its products represented on the dinner table this weekend. McCormick & Co. Inc. (NYSE: MKC) makes spices, sauces and other specialty foods. You know that huge spice rack in the supermarket? McCormick's is likely to occupy a few slots with its peppers and other offerings. And they sure do make burgers taste good.
These flavor enhancers will spice things up when you 'make a plate' this weekend. The stock will enhance you income portfolio as well since it pays a nice 2.7 percent dividend at current levels. I pushed the small cap limit a bit here - McCormick's has a market cap of $5 billion.
Again, don't expect huge growth, but a steady record of profits and expectations of around 10 percent revenue and earnings per share growth means this is a steady earner - exactly the kind of investment that will allow you to stay relaxed when you're enjoying the holiday.
***So there you have it, three American companies with great tasting products that you're almost guaranteed to see over this Fourth of July holiday Weekend. The Boston Beer Company and McCormick and Co. are the best choices to pick up shares in right now, but all three make great tasting products.
Have a fun, and safe, holiday weekend! Our offices are closed Monday so you'll hear from me again next Tuesday.
