We recently published a list of 8 Best Low Float Stocks to Invest in Now. In this article, we are going to take a look at where The Boston Beer Company, Inc. (NYSE:SAM) stands against other best low float stocks to invest in now.
Stocks with low public float refer to shares of a company that are available for trading by the public, but in relatively small quantities. The public float is the portion of a company’s shares that are not held by insiders, such as company executives, or major institutional shareholders who are usually long-term passive investors. When a stock has a low float, it can be more volatile because the smaller supply of shares means that even small changes in demand can significantly impact the stock price. For investors, this can present both opportunities and risks. While low float stocks may see large price movements, they can also be harder to trade, leading to higher spreads and less liquidity, which may be particularly painful when seeking to liquidate the investment. Consequently, investors need to be cautious with low float stocks and only buy them strategically with very high conviction.
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We believe that low float stocks become particularly attractive during times of heightened volatility, which usually happens amid pronounced geopolitical challenges or regime changes, when investors don’t know how to react to rapidly evolving circumstances. With the US stock market officially in correction territory and the implied volatility index more than 75% above the year-to-date lows, the current times perfectly fit our description of uncertainty. First, the markets have negatively reacted to the realization that tariffs will soon become a reality rather than a negotiation tool used by the new administration; the President further announced 50% tariffs on Canadian steel and aluminum, which caused some havoc among investors. On the positive side, some progress on the tariff-avoiding deal between the US and Canada, as well as the ongoing peace negotiations related to Ukraine in Saudi Arabia, provided some optimism and a boost for the stock market. Still, the picture remains dull for many investors who became accustomed to the high-growth 2023-2024 period, fueled by the AI megatrend.
A key piece of the puzzle to keep in mind when picking the right low float stock to invest in is the near- and mid-term outlook for the sector it operates in. It is well known that macroeconomic headwinds in the end market may mute even the most exceptional growth story, regardless of how strong the company’s moat is. We clearly see sluggish conditions in the construction sector, as new data shows a pronounced slowdown in both residential and commercial starts. With tariffs on construction materials kicking in, as well as the new administration being a headwind for immigration, we see this sector potentially remaining pressured for the near future. The consumer discretionary space could see slow growth as well in the upcoming quarters, as recent layoffs, as well as a tanking stock market, are very likely to make consumers more cautious with their spending. Finally, some niches in the industrial sector could also be pressured due to lower federal spending and the deteriorating Capex outlook reported by business surveys. The outlook on every other sector remains unchanged and could potentially nest some exceptional low float stocks to invest in right now.
Our Methodology
To compile our list of low float stocks, we used a Finviz screener to filter for companies that have less than 10 million shares floating for purchase. We then compare the sample with our proprietary list of hedge fund ownership and include the top 8 stocks with the highest number of hedge funds that own the stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A closeup shot of a beer tap pouring a golden lager.
The Boston Beer Company, Inc. (NYSE:SAM)
Number of Hedge Fund Holders: 29
The Boston Beer Company, Inc. (NYSE:SAM) is a beverage company that produces and sells craft beer, hard seltzers, ciders, and other alcoholic beverages. Its portfolio includes well-known brands such as Samuel Adams, Truly Hard Seltzer, Twisted Tea, Angry Orchard, and Dogfish Head. The company distributes its products across the United States and select international markets through a network of wholesalers and retailers. SAM also operates brewing facilities and research centers to develop new flavors and brewing techniques. The Boston-based company ranked sixth on our recent list of 10 Best Beverage Stocks to Buy According to Analysts.
The Boston Beer Company, Inc. (NYSE:SAM) achieved a 31% growth in non-GAAP EPS to $9.43 while delivering 200 basis points of gross margin expansion, reaching 44.4% in 2024. The business demonstrated strong cash generation with free cash flow of $173 million or $14.70 per share, enabling share repurchases of $239 million in 2024. For 2025, the company plans to increase advertising investments across its portfolio to improve market share trends and support the national launch of Sun Cruiser. The company expects 2025 depletions and shipments to range between a decrease of low single digits to an increase of low single digits YoY, with price increases between 1% and 2%. Gross margins are projected to be between 45% and 47% for 2025, with diluted EPS targeted between $8.00 and $10.50.
The Boston Beer Company, Inc. (NYSE:SAM) continues to execute its multiyear productivity plans across procurement savings, network optimization, and brewery performance, which are expected to support gross margin improvement to high-40s to 50% over time. Key growth initiatives include the national expansion of Sun Cruiser, which is expected to more than triple its distribution points between the end of 2024 and peak summer selling season, and continued focus on Twisted Tea, which remains the clear leader in the hard tea category with an 84% market share. The company is operating in a dynamic environment with inflation impacting consumer behavior and increased competition in the fourth category, while maintaining confidence in multiple growth opportunities as lines continue to blur between beer, wine, and liquor. With a public shares float of 8.36 million, SAM is one of the best low float stocks to invest in now.
Overall, SAM ranks 3rd on our list of best low float stocks to invest in now. While we acknowledge the potential of SAM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SAM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.