Investors are paying attention to the beer industry more than ever before – and for good reason.
Not only do they make a product that isn't going out of style anytime soon, they're jumping right into the $10 billion cannabis industry.
But there's massive upside in this space if you know where to look.
And what just flashed on my radar is a unique opportunity to own a little-known, publicly traded beer company that could pop 50% this year. Possibly even sooner.
The fast-growing craft beer industry continues to show strong growth and demand in an increasingly competitive landscape.
And because of a recent pullback in the stock market, the table is being set for a wave of merger and acquisition activity in the coming year.
Finding one of these takeover targets before they're bought out is one of the easiest ways to bag a double-digit profit in a matter of days. As soon as news breaks of a pending acquisition, the share price could surge overnight.
Today, we'll show you one craft beer giant that is very attractive as a takeover target in 2019…
Welcome to the Craft Beer Revolution
Small independent brewers have exploded across the country.
Bart Watson, the chief economist at the Brewers Association (a trade group representing the industry), told the U.S. Census in October 2018 that shifting consumer taste has bolstered the craft industry this decade.
Watson also cited a movement to support local businesses as opposed to multinational brewing operations.
Between 2012 and 2016, the number of craft breweries exploded from 880 to 2,802.
And that figure doesn't include the many restaurants and bars that brew their own beer.
If you include brewpubs, microbreweries, and regional brewers, the figure increased from 2,898 in 2013 to 5,424 by 2016.
Of course, as craft beers became more popular, the expanding, successful ones became takeover targets for the world's top manufacturers.
For example, in 2017, total beer volume fell by 1% in the United States, while craft beer volume increased by 5%.
That's why larger brewers started snatching up smaller players.
Heineken bought out Lagunitas in 2017, and Sapporo purchased Anchor Steam that same year.
But because it has the money to spend, the biggest buyer of craft brewers has been Anheuser-Busch InBev SA/NV (NYSE: BUD). Since 2016, it has snapped up 10 different companies in the space, including Breckenridge Brewing, Devil's Backbone, Four Peaks, and Wicked Weed Brewing.
While dealmaking has slowed down in recent months, many companies are still on the block and are trading at attractive prices.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.