Having a Cold One? Look at These Small Brewers, Vintners and Spirits Distributors

It seems that with the 4th of July and the All-Star break upon us, even SmallCapWorld ought to acknowledge that it is summertime.  That means solar panels will work pretty well, air-conditioners have probably been turned on at least from time to time, and in New York, the Public Theater is performing Shakespeare’s “Twelfth Night” every night in Central Park, and giving all the tickets away free.

It also means that Americans are finding it congenial to cook out, go out, picnic — and perhaps sample a bit of a libation from time to time.  In this article we are going to look at some of the smallcap suppliers of said libations, just in case our readers like to invest in the things they understand (or perhaps want to understand the things they invest in).

A Red Tail Ale van -- Drop me off here, please

A Red Tail Ale van -- Drop me off here, please

It goes without saying that most of the beer, wine & spirits consumed in this day and age are supplied to us by megacorporations, and we are not going to cover those here, so this is definitionally NOT a balanced survey of the alcoholic beverage market.  We are looking at small companies — a couple of craft brewers, an excellent producer of Oregon pinot noir, and some scrappy small distributors with new brands and a lot of chutzpah. 

Start off with a company whose brands most beer drinkers already know: Boston Beer Co Inc (NYSE: SAM, http://www.bostonbeer.com/), the producer of Sam Adams, Samuel Adams, Twisted Tea and HardCider brands among many others.  SAM brews are served up all over the country, although we assume mostly in urban markets, and at least the headliners need no introduction to those who appreciate a cold one on a hot day (or a cold day, for that matter).  SAM shares have been hit in the downturn, and may be worth evaluating if you like their beers.  They closed before the holiday at $29.77, vs a 52-week high of $54.15, for a market cap of $424 million, and on average volume of about 83,000 shares a day.

Taking a step down in market cap, but perhaps not in quality (you taste it, you decide), have a look at Portland OR-based Craft Brewers Alliance (Nasdaq: HOOK, http://www.craftbrewers.com/), whose brands also include boutique beers that are fairly well known to aficionados: Redhook, Widmer Brothers, Goose Island and Kona Brewing, with small breweries from sea to shining sea and in Hawaii as well.  You can tell from the stock symbol which brand came first and is best known.  If you visit their website, click through to the websites of the individual brands — they are very entertaining (you are 21, right?).  HOOK definitely looks like it deserves some due dili to me, having closed at $2.02 on July 2, vs a year-high of $4.89, a market cap of $34 million and piddly volume of 18,000 shares.  Careful bidding would probably pick up some shares here, and — hey — buying your own beer is almost an investment then, right?

But if you prefer a really small brewer, have a look at Ukiah CA-based Mendocino Brewing (EBB: MENB; http://www.mendobrew.com/), makers of birdbrands like Red Tail, Blue Heron and Black Hawk, as well as a specialty beer, Kingfisher.  I have done some close inspection of these brews, and I have to say they pass muster.  If the market for shares is as smart as the market for beer, this company will do well.  But for now, MENB closed at $0.16 on Thursday the 2nd, for a market cap of, umm, under $2 million on almost insignificant volume.  If you read their financials, they have come through a difficult year or so, but they sure do have some good beer. 

OK, so much for beer.  If I have a plate of something hearty, I want some resveritrol with my meal.  It keeps a body young, or so I am told.  And the best source of resveritrol is red wine.   So have a look at Turner OR-based Willamette Valley Vineyards (Nasdaq: WVVI, http://www.wvv.com/).  WVVI has a list of wines as long as your arm, but one thinks first about a luscious and delicate pinot noir first and foremost (hey, it’s Oregon).  WVVI dropped from its year-high of $5.54 to less than $2, but it closed Thursday at $3.21, well on the road to recovery.  Market cap is just under $16 million, though, and trading is “by appointment.”  Still, you buy wine to cellar it if you like it — and you might want to cellar some WVVI along with it. 

Finally, you might want to look at some scrappy distributors who have scoured the country and the globe for the next Grey Goose.  Two very small ones are North Hollywood CA-based Marani Brands (EBB: MRIB, http://www.maranispirit.com/) and NYC-based Castle Brands (Amex: ROX, http://www.castlebrandsinc.com/).  Marani seems to be concentrating primarily on vodka under the company name (maybe it will be the next Grey Goose, it could happen), and Castle Brands is carrying several “premium” (i.e., higher-priced) brands including Gosling rums, Tierra Tequilas and Pallini liqueurs, as well as some bourbon and Irish whiskey.  My father told me you should buy stocks of companies whose products you use or understand — and if you go to the websites of these two companies, you may see a new or old friend.  MRIB closed at $0.08 on Thursday, a far cry from its 52-week high of $2.25, with average volume of 244,000 shares.  ROX closed at $0.20 vs a year-high of $0.85 on average volume of about 97,000 shares.

We’re not suggesting investments here – just writing about companies and stocks we find interesting and newsworthy.  Do your own diligence and consult your own financial advisors.  But you might want to put some of these on your screen (or in your cooler).


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