Social Media Chatter Surrounding Boston Beer Company's Revised Guidance

This week, Social Market Analytics (SMA) looks at Boston Beer Co. Inc. SAM, a producer and marketer of alcohol beverages, selling approximately 50 beers under the Samuel Adams or the Sam Adams brand names in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico.  Shareholders of SAM were handsomely rewarded during the week of December 10 as the stock surged 15.5% on December 13 after the company increased its earnings guidance, expecting 2012 EPS to be between $4.30 and $4.60, compared to its previous estimate of $3.80 to $4.20.  The news prompted analysts at UBS to raise their price target for the stock to $111, which is 18% below the December 13 closing price of $131.94 and is effectively a sell recommendation.  It remains to be seen if this view plays out as SAM’s high-end beer business is very strong and the stock has high short interest with a short float of around 34 percent.  During the week, SAM appeared on SMA’s morning Flash Report, which identifies stocks, in the pre-market, with extreme sentiment levels that are likely to trade with high activity during the upcoming session.  In the pre-market of December 13, our analytics engine identified SAM as the stock with the most positive sentiment from the universe of stocks tracked by SMA.  As the week progressed, SMA’s metrics provided initial indication and later confirmation of positive market sentiment for SAM as traders integrated the company’s highly favorable fiscal guidance.

Beginning on December 12, SMA’s S-Score and S-Mean metrics for SAM entered a transition from neutral to strongly positive territory.  In the pre-market of December 13, SAM’s S-Score surged to 4.2 (Extreme Positive), coincident with a massive spike up in S-Volume indicating unusual social media activity for the stock.  SAM opened at $128.50, a large gap up of 12.5% from the close of December 12.  The stock continued to rally to end the day at $131.94, up 15.5% on high share volume.  The behavior of SMA’s S-Factor metrics measures market trading sentiment and can provide actionable signals for upcoming price movement.  In the pre-market of December 14, market sentiment for SAM maintained strong positive levels, posting an S-Score of 2.22 and a further 16% increase in S-Volume indicating continued high social media activity. The stock opened at $130.00 and entered a sustained rally to close the day higher at $132.38, again on high share volume, for a net gain of 17.2% for the week.

Social Media data are noisy and complex.  A single metric is insufficient to understand sentiment behavior over time.  Our S-Factors are a family of metrics, including volatility, trend and volume measures, designed to provide a complete view of social media signature for each security tracked in SMA’s databases.  SMA's processing engine continuously updates our S-Factors, capturing overnight and pre-market sentiment activities. Clients receive sentiment reports prior to the U.S. market open and intra-day sentiment estimates for tracked stocks, on-demand.   Clients have access to our Sentiment Alerts  feature, which provides real-time notification of changes in sentiment metrics for the stocks on a client’s customized watch list. We invite the reader to visit our website; investigate our market sentiment metrics for SAM, other stocks, industry sectors, and market indices; participate in our FAQ forum; and sign up for our Flash Report and Newsletter.