Ballast Point going public

[plm]

At Costco, its $32 for an assorted 24 pack but only six of them are what I really like, Sculpin. I get it rarely though since its still ten bucks more than the other 24 packs. If Costco starts sells it nationwide, the growth potential would be huge.

At bars/restaurants, the beer is usually priced really high anyway so I choose what I like the best which is the Sculpin.

[Hatfield]

Ballast Point to be acquired by Constellation brands for a cool $1B,

http://www.brewbound.com/news/constellation-to-acquire-ballast-point-for-1-billion

[no_such_reality]

[quote=no_such_reality][quote=deadzone]
As others pointed out, If I am in Seattle for example, for a certain price point I can choose from among dozens of local Seattle craft beers, any number of premium world famous imports, or Ballast Point. How does Ballast Pt win that?
[/quote]

You’re thinking the trap of stocks since the mid-80s. Growth, growth, growth.

Ballast point wins by being sustainable. Capitalized on growth, then maintain a $100 Million a year in revenue and kick out dividends and fat paychecks for the founders. Win.

For IPO buyers, maybe not so much. To win, they don’t have to be best, they don’t have to be cheapest they don’t have to largest, they just have to be a viable artisanal choice to the scale of the product they produce. For as long as the foodies are willing to pay $12/6-pack.[/quote]

Okay, I’ll stand corrected, no shame in selling out for a billion.

[Anonymous]

Great, now can target shorting STZ. Even prior to this they had a very bubblish chart.

[livinincali]

[quote=deadzone]Great, now can target shorting STZ. Even prior to this they had a very bubblish chart.[/quote]

Probably not a bad plan. They are buying growth by taking on huge debt loads. A little bit like how Valeant Pharmaceuticals (VRX) was growing. You don’t know when that debt load is going to matter and pop the stock but it should happen in the not too distance future.

[Anonymous]

Although practically speaking the entire S&P is equally over-valued so far simpler just to short S&P, when the market bubble pops everything is going to shit the bed.

[Hatfield]

Pretty much. Look at it this way: Ballast Point sold for 10 times forward earnings, and 20 times trailing earnings. That’s cheaper than the S&P.

According to Forbes, the Chargers are only worth $920M. Which would you rather own?

[poorgradstudent]

I love craft beer, although Ballast point isn’t my favorite, simply because like Stone they’ve followed the trend “Throw literally as much hops you can possibly fit into a beer and make mouths pucker”. I prefer maltier beers. I also think Ballast Point’s price point is tough to swallow… I love to spend $6 for a 6 pack at Trader Joe’s (some of their Generics are as good or better than anything by Ballast Point), and really hate breaking that $10/6 pack mark.

Having gone to tasting rooms a few times and experienced how much better beer straight from the tap is, I’m tempted to get more into the growler scene. Mother Earth is one case where the Cali Creaming beer is AMAZING on tap at the brewery, and pretty unexciting from a can from the store.

I do think it’s a crowded industry, and one that historically has to work with small margins. Usually with an IPO you want a company that has potential to grow exponentially. I’d proceed with serious caution depending how it is priced.

[Anonymous]

The price point of this type of beer is really what I don’t get. I’m simply not going to pay $12 a six pack for any beer at the store, there are just far two many good beers available for much less. And to pay this for a domestic beer that is brewed down the street (vs. premium imported from Germany for less?).

I also agree with poorgrad, I really only enjoy these types of beers off the tap anyway so really only interested when I am at a brew pub. Back in the day these used to be called “micro brews”, not sure when the term craft beer became vogue but the same damn thing.

[Hatfield]

[quote=deadzone](vs. premium imported from Germany for less?).[/quote]

You keep saying that so I’m curious. What’s your go-to premium imported beer from Germany?

[Anonymous]

I personally rarely buy German or any imported beer but I know I can get Spaten, for example, for about $8 at Trader Joes. At Bevmo, most German beer is less than or equal price to Ballast Pt.

[Hatfield]

Yeah, ok. At 2 million barrels per year I wouldn’t exactly call Spaten premium. It’s a factory beer. It’s sorta like the Michelob of Germany. Which actually isn’t a bad analogy, since Spaten is owned by Anheuser-Bush-InBev.

[Anonymous]

So it has to be low production to be premium? Either way it is certainly premium by American standards.

[Hatfield]

That’s pretty much the definition of a craft beer. Small batches, quality ingredients, tight quality control, adventurous recipes. They brew beers like this in Germany too, and they’re expensive.

I agree that Spaten is premium compared to most American beers, but most American beer is not very good. And Spaten isn’t really considered a premium brand in Germany. Like I said, it’s pretty much their Michelob.

[Anonymous]

I actually like most American beer. Back in the 90s I was into micro-brews and the alternative beers and what not, mostly out of rebellion from all the Busch Light I was forced to drink in College.

Now I’ve come full circle. I love Bud for general purpose drinking, particularly summer time. 30 cans for $16 at Walmart is a no-brainer. I generally don’t care for IPAs but if I want a beer with fuller taste, usually drink them at the Brew Pubs out of the tap.

Trader Joes sells decent beers too at a buck a bottle. I like the Bohemian they sell.

I just can’t fathom paying $2 a bottle for domestic.

[Author]

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