Beverage Stock Review, Monday 2/23/2015
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As most of you should be aware, we launched a Beverage Stock Review last week with our Top Picks for 2015 and we now have our first "Initiation of Coverage" report out today on American Brewing.
Top Picks for 2015: http://www.beveragestockreview.com/2015-picks.html
Beverage Stock Review Magazine: https://flipboard.com/@institution73s6/beverage-stock-review-m1rlrbvsz
1. Initiating Coverage on American Brewing (ABRW) $0.36
American Brewing Company, Inc.
180 West Dayton Street
Edmonds, WA 98020
This report (newsletter) is your basic "look at what we found" heads-up on American Brewing (ABRW) from Edmonds, WA on the Puget Sound, next to the Edmonds Yacht Club and the Harbor Square Athletic Club.
Very convenient to workout, grab a beer and food (pizza and sandwiches) at their Brewery/Tasting room, and then jump on your Yacht and motor down to Seattle with a few growlers aboard- which is about 18 miles to the south.
Here is their website: http://americanbrewing.com/
We like their beer so much (they sent us a case), we decided to sign them up as a client. That and the fact that they have a ridiculously small market capitalization of only $4.5 million - with the shares trading at $0.36. We officially added it to the Watch List at $0.31 so we're off to a decent start - being up 16% in a week.
But that's neither here nor there. What is here, is we have small brewer in the very hot craft brewery sector that investors haven't heard of (outside of the Seattle area - they started brewing in the new facility in 2011) that went public "on their own" so to speak (self underwritten vs. traditional IPO). And what so typically happens when a small company goes public without an investment bankers -- with brokers to tell investors about it -- it just drifted down from roughly $2.00, to what we believe is a bottom at $0.30 a share a week ago.
We will note they did a private placement at $0.50 and while we can't know for sure, there is a real good possibility that some of those investors decided to hightail it, when it was trading over $2.00 and on the subsequent way down. Which if we are right about the companies long term potential, is a gift from the brewery Gods to us.
Prospectus dated 4/10/2014: http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9928908
As it stands, the company probably only has a few hundred shareholders (probably locals) with Neil Fallon, the founder owning the majority or 5.6 million, of the 12 plus million shares outstanding.
The Company produces beer under trade names including, among others, Breakaway IPA, Flying Monkey Pale Ale, Caboose Oatmeal Stout, American Blonde, Piper's Scotch Ale, Brave American Brown Ale and Winter Classic. Our favorite is the Breakaway IPA an India Pale Ale with a hockey player on the label. A real man's beer with a 7.2 ABV.
Their Beer: http://americanbrewing.com/our-beer/
The Breakaway IPA's aroma is one of beer's most complex features. Aroma is propelled by lively CO2 and dampened by pillowy heads - especially nitrogen foam (Ah, no. we didn't write that. We describe good beer as "damn that's good.") The description came from here: http://www.ratebeer.com/beer/rate/139491/
Their master brewer is the highly renowned Harold "Skip" Madsen. Mr. Madsen has won 10 gold medals, 12 silver medals, 7 bronze medals and 1 People's Choice Medal from major beer festivals. He is the man.
Skip Madsen: http://americanbrewing.com/master-brewer/
Typical testimonial from Yelp:
"Every time I'm up north in Edmonds, I try to swing by American Brewing to see what's new. They have a very comfortable taproom with TVs and cheerful patrons and servers. I've been by in the summertime when their doors are open to the sunshine and the grill is fired up with hot dogs and other BBQ treats. I've been there when they have exceptional live music. Popcorn too!"
"Every time I go, the beer is outstanding. Skip Madsen is one of our area's most experienced and treasured brewmasters, and his beers are consistent, high-quality and delicious. Now that they are up and running on a bigger brewhouse and with more beer capacity, they have a greater variety of specialty and seasonal beers than ever before."
On to bigger news (we do have a full report coming):
Christian McMahan who spent his early years at Boston Beer Company and then went on to become the VP of Marketing at Diageo North America and Chief Marketing Officer at Heineken USA has been retained to help American Brewing with its expansion efforts. Hmm, the former Chief Marketing Officer at Heineken USA...
EDMONDS, WA / ACCESSWIRE / February 10, 2015 / American Brewing Company, Inc., (ABRW) ("ABC"), an award-winning micro-brewing company based out of the Pacific Northwest, today announced that it is partnering with East Coast based Smartfish Group to lead its marketing and communication efforts.
Neil Fallon, CEO of American Brewing, was quoted as saying, "As we embark on this new year, we begin by strengthening our core message to the consumer. Christian McMahan and the team at Smartfish can help us refocus and deliver that message across our current and anticipated new markets in 2015."
Smartfish Group is spearheaded by an experienced team of marketing and creative leaders who have a long history of success in US beer market. McMahan spent his early years at Boston Beer Company then went on to become the VP of Marketing at Diageo North America and Chief Marketing Officer at Heineken USA. Said McMahan of the opportunity to develop new messaging for American Brewing Company, Inc, "We look forward to our new relationship with American Brewing Company. Neil and his team have done a fantastic job of laying down a strong foundation and we are so excited to be a part of helping them build an even better future."
"After a long year of expansion and getting used to the complete overhaul of our brewery, we are thrilled to have this caliber of marketing genius behind us as we move into 2015. We cannot wait to start pitching the new concepts to distributors in our target markets. Stay tuned for lots of exciting news from ABC this year!", says Fallon.
So stay tuned to Neil and stay tuned to us.
2. Craft Beer Drinkers Just Love Their IPAs (CNBC)
In its first year, Gun Hill Brewing has rolled out its Gold ale, made for easy, extended drinking; fruity ales tailored to warm weather and an award-winning stout. None of those varieties, though, has sold as well as Gun Hill's India Pale Ale.
"Obviously, people like the flavor of it. But I think it's become so popular because there are very few beers people can see and immediately recognize," said Dave Lopez, co-managing partner of the Bronx, New York-based microbrewery.
The hop-heavy, high-alcohol brew has grown at a faster pace than the ever-expanding U.S. craft beer market. IPA sales in the 52 weeks ended Jan. 25 jumped nearly 50 percent from the previous year, according to IRI, a Chicago-based market research firm. The wider craft segment rose about 20 percent.
IPAs accounted for about a quarter of craft sales in that span. Fervor for the hop-heavy ale shows no signs of slowing.
3. Anheuser-Busch Buys Another Craft Brewer (CNBC)
Anheuser-Busch InBev continues to get craftier.
The brewing conglomerate is purchasing Seattle-based Elysian Brewing Company for an undisclosed amount. Founded in 1995, Elysian sold more than 50,000 barrels of beer in 2014.
"Elysian's story includes everything we look for in a partner," said Andy Goeler, CEO of Anheuser-Busch's Craft division, in a statement. "As the fastest-growing brewer in Washington, their recipe is working. Elysian's brands are an important addition to our high-end beer portfolio, and we look forward to working together."
The acquisition is the latest in series of moves by Anheuser-Busch InBev to expand its craft beer portfolio.
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In 2014, Anheuser-Busch acquired Patchogue, New York-based Blue Point Brewing and Bend, Oregon-based 10 Barrel Brewing. A-B's craft group also includes Chicago's Goose Island Beer Company, which it bought for $38.5 million in 2011.
"After a lot of hard work, we've grown from one Seattle brewpub to four pub locations and a production brewery," said Joe Bisacca, Elysian CEO and co-founder. "With the support of Anheuser-Busch, we will build on past successes and share our beers with more beer lovers moving forward."
Full Article: http://www.cnbc.com/id/102364498
Roland Rick Perry
Managing Director, Institutional Analyst Inc.
Harvest Exchange: https://www.hvst.com/14283-roland-rick-perry
Disclosure: The author is long ABRW.
Additional disclosure: Disclaimer: http://www.beveragestockreview.com/about-us.html