Big Changes: The Sam Can and The Dollar Menu – Boston Beer Co Inc (SAM), McDonald’s Corporation (MCD)

Page 1 of 2
Boston Beer Co Inc (NYSE:SAM) recently announced that it will offer its signature beer, Sam Adams Boston Lager, in a can for the first time this summer. Previously the number one ranked craft brewer had only sold it in a bottle. Founder Jim Koch had resisted the temptation for years, even going as far as promising in a 2005 “Beer Drinkers Bill Of Rights” that his brew would never be put in a can.

Boston Beer Co Inc (NYSE:SAM) has been on somewhat of a roll lately, announcing record beer sales and increased guidance for 2013 earnings even though  profits for the last quarter dropped a bit. The stock has soared about 40% over the last 3 months.
With a P/E of about 36 (higher than its historical average, its peers and the overall market) some analysts are saying that the stock is overvalued and is ripe for a fall.
However, in spite of the dropoff in earnings and elevated P/E Boston Beer Co Inc (NYSE:SAM) still has a lot going for it:
1. Near zero debt levels: TTM long term debt/equity = 0.2%
2. Founder still in charge: although he has given up the CEO post Jim Koch remains the board chairman and uses an old family recipe
3. Relatively small size: with a market cap of about $2 billion the company is still agile enough to keep growing and reacting to market pressures and the many competitors in the craft brew space
McDonald's Corporation (NYSE:MCD)Another company that is in the midst a change right now is McDonald’s Corporation (NYSE:MCD). Last October (and again for February) it reported that monthly same store sales had declined. The company has provided cautious guidance going forward.
It reacted quickly late last year with a new advertising pitch emphasizing their low-cost dollar menu instead of the more pricer extra value offerings.
McDonald’s Corporation (NYSE:MCD) has always seemed to get through rough patches in the past and consistently provide solid returns for shareholders. It seemed to ride though the last recession without missing much of a beat. McDonald’s Corporation (NYSE:MCD) stock has been one of the best performers in the Dow Industrial Average since the recession ended about 4 years ago.
How have other companies fared after changing some aspect of its operation or a product?
In 1985 The Coca-Cola Company (NYSE:KO) changed the formula for its top-rated soft drink. Although various taste tests confirmed that “New Coke” performed much better than “Old Coke” and competitor products many consumers were nostalgic for the original version. The company reversed course and later that same year reintroduced the old recipe as “Coke Classic.”

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!