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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards 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!