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Saturday, October 13, 2012

Beer, Tea, and Dr. Pepper

We have more beverage companies in our Foodstuffs analyses, and today's are Boston Beer (SAM) and Dr. Pepper Snapple (DPS). Boston Beer, better known as Samuel Adams Beer Company, is a conglomeration of beer distributors that was first established in 1984. The current CEO is Martin Roper. We were quite impressed with Boston Beer's performance on the stock market: public in '95, Facebook-like downturn in '96, steady growth until 2007, drop in 2008, and skyrocketing since 2009. Since going public, actually, it has grown almost 80 points. Around September 20th, Denver Beer Company, one of SAM's competitors, was endorsed, and Samuel Adams fell two points over that week. After reaching a month-high of about $114, the company had its rating decreased and the share price dropped $5. We bought ten stocks in the company at $107.42 (expensive share) and after just a few days had already made $16. This profit, unfortunately, took a turn downhill and we are now at $6 in loss. Even with this change, we do suggest to invest in Boston Beer. Buy now and sell when it reaches the $115s again.
Our other beverage distributor, and our last of the series, is Dr. Pepper Snapple Group. This company was established in 1885, with Dr. Pepper alone. In 2008, it merged with Snapple to form the current company. The current CEO is Larry Young. At first view of the stocks since the merge, the company seems to be fairly stable and profitable. This is an extreme deviation from the actual stocks of DPS. We further delved into recent prices and found heavy fluctuations from day to day. On September 13th, the market closed at $45.4. The next day, the company was reported growing and healthy; it opened at $44.5 that same day, and closed at $44.1. On September 25th, Coca-Cola was reported to have bought a large quantity of shares from Aujun, and Dr. Pepper Snapple's stocks plummeted further to down $43.6. Although we love Snapple and Dr. Pepper, we advise against investing in the company for now. The stocks are very unstable and unpredictable. We have lost $10 in simulated investments in the company on just 10 shares.

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