boston beer sam fairly valued buying index™ 5 value rating

Valuentum Retail Equity Research Ratings as of 10-Sep-2021 Data as of 6-Sep-2021

Buying Index™ 5 Value RatingEconomic Castle

Attractive

Investment ConsiderationsDCF ValuationRelative Valuation

Stock Chart (weekly) ValueCreation™ValueRisk™ValueTrend™Cash Flow GenerationFinancial LeverageGrowthTechnical EvaluationRelative StrengthMoney Flow Index (MFI)Upside/Downside Volume (U/D)Near-term Technical Resistance, 10-wk MADCF = Discounted Cash Flow; MFI, U/D = Please see glossary. MA = Moving Average

Business Quality ValueCreation™

ValueRisk™ Very Poor Poor Good ExcellentCompany Vitals Investment HighlightsMarket Cap (USD) $6,871Avg Weekly Vol (30 wks) 1,15730-week Range (USD) 551.47 - 1349.98Valuentum Sector Next Generation5-week Return -15.6%13-week Return -45.7%30-week Return -52.4%Dividend Yield % 0.0% Firms that generate economic profits with little operating variability score near the top right of the matrix.

Dividends per Share 0.00 Relative Valuation Forward P/E PEG Price / FV

Forward Dividend Payout Ratio 0.0% Monster Beverage 36.3 2.7 95.4%Est. Normal Diluted EPS 40.99 Roku 720.3 NMF 97.3%P/E on Est. Normal Diluted EPS 13.6 Wayfair 60.1 7.5 86.7%Est. Normal EBITDA 742 Zoom Video 64.5 3.5 83.0%Forward EV/EBITDA 13.8 Peer Median 62.3 3.5 91.0%EV/Est. Normal EBITDA 9.0 Boston Beer 21.8 1.3 80.1%Forward Revenue Growth (5-yr) 19.3% Price / FV = Current Stock Price divided by Estimated Fair Value

Forward EPS Growth (5-yr) 28.5% Financial Summary ProjectedNMF = Not Meaningful; Est. = Estimated; FY = Fiscal Year

Fiscal Year End: Dec-19 Dec-20 Dec-21

Returns Summary 3-year Historical Average Revenue 1,250 1,736 2,526Return on Equity 20.7% Revenue, YoY% 25.5% 38.9% 45.5%Return on Assets 14.7% Operating Income 146 248 390ROIC, with goodwill 23.9% Operating Margin % 11.7% 14.3% 15.4%ROIC, without goodwill 26.1% Net Income 110 192 312ROIC = Return on Invested Capital; NMF = Not Meaningful Net Income Margin % 8.8% 11.1% 12.4%Leverage, Coverage, and Liquidity Diluted EPS 9.24 15.63 25.65In Millions of USD Diluted EPS, YoY % 21.0% 69.2% 64.1%Total Debt 0 Free Cash Flow (CFO-capex) 85 113 199Net Debt -163 Free Cash Flow Margin % 6.8% 6.5% 7.9%Total Debt/EBITDA 0.0 In Millions of USD (except for per share items)

Net Debt/EBITDA NMF MID-CAPEBITDA/Interest Excellent GOODCurrent Ratio 1.6Quick Ratio 1.0

Industry $698.00 $506.00 - $890.00 MID-CAP BLEND Next Generation Disruptive Innovation

Visit us at www.valuentum.com

Boston Beer SAM FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector

EXCELLENTMEDIUM

POSITIVESTRONG

LOWAGGRESSIVE

We significantly reduced our fair value estimate for Boston Beer as the US hard seltzer market has become quite saturated while total consumption growth in this arena has slowed down considerably of late.

FAIRLY VALUEDATTRACTIVE

NEUTRALWEAK

OVERSOLDBEARISH

690.00

The week with the highest trading volume out of the last 30 weeks was a week of heavy selling, or distribution (red bar).

• Concerns had been cropping up that the 'Better Beer'market may be reaching a saturation point. Smallerbreweries had been gaining share, but the COVID-19pandemic served as a catalyst for volumes to surge.Boston Beer has benefited greatly.

• Boston Beer is focused on innovating within theSamuel Adams family, integrating persuasive drinkerprogramming across point of sale, promotions, andmedia for all brands while prioritizing the core stylesof its new Truly brand, Angry Orchard, Twisted Tea,Traveler, and Coney Island Hard Root Beer. Theperformance of these styles will be key.

----- Actual -----

• Total consumption growth seen at the US hardseltzer hard has slowed down considerably of late,which weighs quite negatively on Boston Beer’sgrowth outlook. Inflationary headwinds need to bemonitored going forward, with an eye towardslogistics and raw materials expenses.

Medium 1High

Low• Boston Beer brews handcrafted, full-flavored beers.Its Samuel Adams brand is among the US' largestbrands in the Better Beer category, which accounts for20%+ of US beer consumption by volume. The firmbrews over 60 different styles of beer and sells millionof barrels of its products each year. It was founded in1984 and is headquartered in Boston. Very High

• Due to its lower market share and the high amount oftaxes it pays, Boston Beer may be a takeout candidatefor a large foreign brewer. M&A activity at-largeremains strong in the US. Founder Jim Koch said thathe is likely the last American owner of Boston Beer.

NMF = Not Meaningful

The information and data contained in this report is not represented or warranted to be timely, complete, accurate, or correct. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this report, you should consider whether the information is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Structure of the Beverages (alcoholic) IndustryThe beer industry is structured as an oligopoly, with three players generating over half of industry profits. Though smaller industry constituents may price competitively at times, we view the overall industry structure as a rational oligopoly. Further consolidation in the space cannot be ruled out, and we would not be surprised to see larger players continuing to participate. Global operators will benefit from exposure to Asia, Africa, and Latin America, where beer consumption is growing at a pace several times that of mature markets such as North America and Western Europe. We like the structure of the group.

469.00

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969.00

1,069.00

1,169.00

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1,369.00

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Valuentum Retail Equity Research (10=best) Data as of 6-Sep-2021


Attractive

Economic Profit Analysis

ValueCreation™ EXCELLENT Return on Invested Capital (ROIC)

ROIC - WACC Spread, 3-year historical average 16.9%ROIC - WACC Spread, 5-year projected average 39.3%These spreads equal the firm's annual average ROIC (excluding goodwill) less its WACC.

ValueTrend™ POSITIVE

Weighted Average Cost of Capital (WACC) The graph above shows the firm's ROIC (excluding goodwill) compared with historical averages and its WACC.

ROIC CalculationFiscal Year End: Dec-18 Dec-19 Dec-20

Earnings before InterestOperating Income after Depreciation 117 146 248- Adjusted Taxes (at 20% of EBIT) 23 29 50+ Amortization 0 0 0+ Non-cash Operating Items 4 12 -5- Minority Interest 0 0 0Earnings before Interest 98 129 193

Cost of Equity Invested CapitalRisk Free Rate Assumption Inventories 70 106 131Fundamental Beta (ERP multiplier) + Receivables 40 64 88Estimated Equity Risk Premium + Current Deferred Income Taxes 0 0 0Cost of Equity Assumption + Other Current Assets 13 12 31

+ Property, Plant and Equipment, Net 390 541 623After-tax Cost of Debt + Goodwill, Net (Cost in Excess) 4 113 113Risk Free Rate Assumption + Intangibles 0 104 104Synthetic Credit Spread + Non Current Deferred Income Taxes 0 0 0Cost of Debt Assumption - Accounts Payable 47 76 122Cash Tax Rate Assumption - Other Current Liabilities 0 0 0After-tax Cost of Debt Assumption

Invested Capital, with goodwill 470 863 968Cost of Preferred Stock Invested Capital, without goodwill 466 751 855Preferred DividendsValue of Preferred Stock Return on Invested Capital, with goodwill 25.0% 22.3% 24.3%Cost of Preferred Assumption Return on Invested Capital, without goodwill 25.2% 24.7% 28.4%

In Millions of USD

Weighted Average Cost of Capital (WACC)ERP = Equity Risk Premium

Boston Beer SAM FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector Industry

Boston Beer receives a ValueTrend™ rating of POSITIVE, which is based on thecompany's trailing three-year performance. The firm's ROIC (excluding goodwill)increased to 28.4% last year from its trailing 3-year average of 26.1%. We expect ROIC(excluding goodwill) to be in the ballpark of about 50% by the end of our discreteforecast period, with upside potential to about 64% over that time period.

---------- Actual ----------

4.3%

$698.00 $506.00 - $890.00 MID-CAP BLEND Next Generation Disruptive Innovation

The best measure of a firm's ability to create value for shareholders is expressed bycomparing its return on invested capital (ROIC) with its weighted average cost ofcapital (WACC). The gap or difference between ROIC and WACC is called the firm'seconomic profit spread. Boston Beer's 3-year historical return on invested capital(without goodwill) is 26.1%, which is above the estimate of its cost of capital of 9.2%.As such, we assign the firm a ValueCreation™ rating of EXCELLENT. In the chart tothe right, we show the probable path of ROIC in the years ahead based on the estimatedvolatility of key drivers behind the measure. The solid grey line reflects the most likelyoutcome, in our opinion, and represents the scenario that results in our fair valueestimate.

20.0%NA

00

NA

9.2%

0.86.5%9.2%

4.3%NANA


Note: Valuentum may provide an adjusted ROIC measure to better reflect the economic substance of a company's operations, as in the case of companies with negative invested capital.

64.1%

50.0%

25.2% 24.7%28.4%

35.9%

WACC, 9.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

100.0%

0.0% Equity

Debt

Preferred

Capital Structure



Attractive

Growth Analysis

Revenue Growth AGGRESSIVE Projected Revenue (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

Revenue3-year Historical

CAGR5-year Projected

CAGRBoston Beer USD 1,736 26.2% 19.3%

Monster Beverage USD 4,599 10.9% 11.3%

Roku USD 1,778 51.4% 36.3%

Wayfair USD 14,145 44.2% 10.9%

Zoom Video USD 2,651 159.6% 31.4%

Peer Median 47.8% 21.4%

Industry Median 21.3% 18.9%

In the chart above, we show our baseline forecast for revenue as well as potential upside and downside cases.

EBITDA Growth Projected EBITDA (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

EBITDA3-year Historical

CAGR5-year Projected

CAGRBoston Beer USD 314 22.8% 25.0%


Roku USD 67 -267.4% 78.8%

Wayfair USD 780 -276.2% 9.7%

Zoom Video USD 793 384.4% 38.6%

Peer Median -128.3% 26.0%


In the chart above, we show our baseline forecast for EBITDA as well as potential upside and downside cases.

Net Income Growth Projected Net Income (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year Net Income

3-year Historical CAGR

5-year Projected CAGR

Boston Beer USD 192 24.7% 27.2%


Roku USD -18 -34.3% -321.0%

Wayfair USD 185 -191.1% 21.1%

Zoom Video USD 672 -533.7% 40.5%


Industry Median 8.5% -23.2%

In the chart above, we show our baseline forecast for net income as well as potential upside and downside cases.


Boston Beer's revenue expansion has trailed the median of its peer group but has beengreater than that of its industry group during the past three years. We expect the firm'srevenue to trail its peer group but outpace that of its industry group during the next fiveyears. Our growth assessment of each firm is based on the firm's 5-year forwardrevenue CAGR. Boston Beer's future pace of revenue growth is AGGRESSIVE, in ouropinion.


Boston Beer's EBITDA expansion has been greater than that of both its peer group andindustry group during the past three years. We expect the firm's EBITDA to trail itspeer group but outpace that of its industry group during the next five years.Roku sportsthe highest expected EBITDA growth rate among peers.

Boston Beer's net income expansion has been greater than that of both its peer groupand industry group during the past three years. We expect the firm's net incomeexpansion to outpace its peer group and industry group during the next five years.Zoom Video sports the highest net income growth rate among peers.


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Attractive

Cash Flow and Financial Leverage AnalysisCash Flow Generation STRONG Financial Leverage LOW

The bars above show the firms operating cash flow, capital expenditures, and free cash flow, respectively. The bars above show the firm's annual debt-to-EBITDA. The red line shows the firm's normalized measure.

Cash Flow from Operations Projected Operating Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year CFO


5-year Projected CAGR



Roku USD 148 -195.5% 58.2%

Wayfair USD 1,417 112.2% 8.9%

Zoom Video USD 1,471 323.1% 26.2%

Peer Median 61.8% 20.4%


In the chart above, we show our baseline forecast for CFO as well as potential upside and downside cases.

Free Cash Flow (CFO-capital expenditures) Projected Free Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year FCF


5-year Projected CAGR Source: Company Filings, Valuentum Projections



Roku USD 66 -346.5% 76.4%

Wayfair USD 1,231 -355.0% 6.1%

Zoom Video USD 1,391 293.1% 26.3%



In the chart above, we show our baseline forecast for free cash flow as well as potential upside and downside cases.


Firms that generate a free cash flow margin (free cash flow divided by total revenue)above 5% are usually considered cash cows. Boston Beer's free cash flow margin hasaveraged about 8.1% during the past 3 years. As such, we think the firm's cash flowgeneration is relatively STRONG. The free cash flow measure shown above is derivedby taking cash flow from operations less capital expenditures and differs fromenterprise free cash flow (FCFF), which we use in deriving our fair value estimate forthe company. For more information on the differences between these two measures,please visit our website at Valuentum.com. At Boston Beer, cash flow from operationsincreased about 55% from levels registered two years ago, while capital expendituresexpanded about 152% over the same time period.

Firms that exhibit high leverage tend to be more risky than firms with relatively lowdebt loads, all else equal. We measure financial leverage by taking a firm's currenttotal debt load and dividing it by the firm's trailing average 3-year annual EBITDA.Firms that are over 3 for this metric, we rate as having high leverage. Companies thathave less than 1.5 turns of leverage (or a measure below 1.5), we rate as having lowleverage. Boston Beer's normalized debt-to-EBITDA measure of about 0 puts it in theLOW camp.


Boston Beer's cash flow from operations expansion has trailed that of its peer group buthas been greater than that of its industry group during the past three years. We expectthe firm's cash flow from operations expansion to outpace its peer group and industrygroup during the next five years. Roku sports the highest expected cash flow fromoperations growth rate among peers.

Boston Beer's free cash flow expansion has been greater than that of its peer group buthas trailed that of its industry group during the past three years. We expect the firm'sfree cash flow expansion to outpace its peer group and industry group during the nextfive years. Roku sports the highest expected free cash flow growth rate among peers.


163178

253

55

93

140108

85113

Dec-18 Dec-19 Dec-20

Cash from Operations Capital Expenditures Free Cash Flow

Boston Beer -normalized

leverage, 0.00

0

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12/31/2018 12/31/2019 12/31/2020

Boston Beer- annual leverage Boston Beer - normalized leverageMedium Threshold HighThreshold

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Attractive

Valuation Analysis

Valuation Assumptions Valuation BreakdownIn Millions of USD (except for per share items)

Revenue CAGR %Avg. EBIT Margin %Avg. Cash Tax Rate %Earnings Before Interest CAGR %Earnings Per Share CAGR %Free Cash Flow to the Firm CAGR %Earnings before interest = Net operating profits less adjusted taxes

Phase II --> III FCFF CAGR % 4.5% (II) 3% (III)Cost of Equity %After-tax Cost of Debt %Discount Rate (WACC) %Synthetic credit spread = 0.46%

Phase I Present ValuePhase II Present ValuePhase III Present ValueTotal Firm Value

Net Balance Sheet Impact

Total Equity ValueDiluted Shares OutstandingFair Value per Share

DCF Valuation Summary Enterprise Free Cash FlowFiscal Year End: 12/31/2018 12/31/2019 12/31/2020

98 129 19352 56 6655 93 140

9 31 3 - Acquisitions 0 166 0

86 -104 116In Millions of USD

Source: Company Filings, Valuentum Projections

Company NameValuentum Buying

Index™Forward Price-to-

Earnings

Price/Earnings-to-Growth (PEG), 5-

yearEV/Est. Normal

EBITDA

5-year Forward Earnings per Share CAGR

3-year Hist Avg ROIC, without

goodwillDividend Yield

%

Stock Price / Fair Value Estimate

Boston Beer 5 21.8 1.3 9.0 28.5% 26.1% 0.0% 80.1%

Monster Beverage 7 36.3 2.7 19.9 13.7% 62.9% 0.0% 95.4%

Roku 3 720.3 NMF 65.2 -300.2% -64.0% 0.0% 97.3%

Wayfair 3 60.1 7.5 20.5 19.3% 42.7% 0.0% 86.7%

Zoom Video 3 64.5 3.5 33.5 38.3% Negative IC 0.0% 83.0%

Peer Median 3.0 62.3 3.5 27.0 16.5% 42.7% 0.0% 91.0%

Industry Median 5.0 32.7 2.4 26.1 -26.0% 22.0% 0.0% 96.3%



5-year Projections In the chart below, we show the build up to our estimate of total enterprise value forBoston Beer and the break down to the firm's total equity value, which we estimate tobe about 8.58USD billion. The present value of the enterprise free cash flowsgenerated during each phase of our model and the net balance sheet impact isdisplayed. We divide total equity value by diluted shares outstanding to arrive at our$698 per share fair value estimate.

19.3%17.1%20.0%

9.2%Results1,434

28.7%28.5%36.5%

Long-term Projections

9.2%NA

163

8,57912.3

$698.00

3,9323,0508,416

Company Metrics versus Peer and Industry Medians

P/E on Est. Normal Diluted EPS Forward EV/EBITDA

13.6 13.8

In Millions of USD

---------- Actual ----------

We think Boston Beer is worth $698 per share with a fair value range of $506.00 -$890.00. The margin of safety around our fair value estimate is driven by the firm'sMEDIUM ValueRisk™ rating, which is derived from an evaluation of the historicalvolatility of key valuation drivers and a future assessment of them. Our near-termoperating forecasts, including revenue and earnings, do not differ much from consensusestimates or management guidance. Our model reflects a compound annual revenuegrowth rate of 19.3% during the next five years, a pace that is lower than the firm's 3-year historical compound annual growth rate of 26.2%. Our model reflects a 5-yearprojected average operating margin of 17.1%, which is above Boston Beer's trailing 3-year average. Beyond year 5, we assume free cash flow will grow at an annual rate of4.5% for the next 15 years and 3% in perpetuity. For Boston Beer, we use a 9.2%weighted average cost of capital to discount future free cash flows.

Earnings before Interest+ Depreciation - Capital Expenditures - Change in Working Capital

Enterprise Free Cash Flow (FCFF)

Our future forecasts for key valuation drivers result in a future free enterprise cashflow stream. Above, we show how we calculate enterprise free cash flow and thehistorical performance of the metric for Boston Beer. Over the next five years, weexpect the firm's enterprise free cash flow to expand at about a 36% compoundannual growth rate. During years 6 through 20, we expect the measure to grow at a4.5% rate. Beyond year 20 (in perpetuity), we grow the firm's free cash flow atinflation (3%).

41.7 52.9

45.3 39.7

41.8 21.7

25.9 26.4

146.2 225.5

49.0 24.0

View back of report for a full list of industry constituents covered by Valuentum. VBI: Valuentum's ranking for the attractiveness of this investment at the date of the report.


1,434

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3,050

163

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01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

Yr 1-5 Yr 6-20 Perpetuity Net Balance SheetImpact

Equity Value



Attractive

Margin of Safety Analysis

Range of Potential Outcomes ValueRisk™ MEDIUM

Revenue Volatility 22.2%Gross Margin Volatility 19.6%Earnings (EBI) Volatility 22.6%Cash Flow (FCFF) Volatility Greater than 50%Fair Value Range 27.5%The Fair Value Range sets the premium or discount on our estimate of the firm's fair value.

Upside and Downside ProbabilitiesProbability (fair value < $0) Less than 0.1%Probability (fair value > 2x current share price) 1.42%

Future Path of Fair Value

The graph above shows the expected future fair value of the firm's shares relative to its current stock price.


Our discounted cash flow process values each firm on the basis of the present value ofall future free cash flows. Although we estimate the firm's fair value at about $698 pershare, every company has a range of probable fair values that's created by theuncertainty of key valuation drivers (like future revenue or earnings, for example). After all, if the future were known with certainty, we wouldn't see much volatility in themarkets as stocks would trade precisely at their known fair values. Our ValueRisk™rating sets the margin of safety or the fair value range we assign to each stock. In thegraph above, we show this probable range of fair values for Boston Beer. We think thefirm is attractive below $506 per share (the green line), but quite expensive above $890per share (the red line). The prices that fall along the yellow line, which includes ourfair value estimate, represent a reasonable valuation for the firm, in our opinion.

We strive to answer a few questions that investors often ask: 1) What are the chancesof a total loss of investment in this company? and 2) What is the chance that thecompany is really worth twice what I paid for it? The probability (fair value < 0)strives to answer the first question. It indicates the chance that the firm mayencounter insolvency based on the characteristics of its cash flow stream, capitalstructure, and risk profile. The probability (fair value > 2x current share price) strivesto answer the second question. It is our best estimate of whether investors areparticipating in a half-off sale by buying the company's shares at current prices.

We estimate Boston Beer's fair value at this point in time to be about $698 per share.As time passes, however, companies generate cash flow and pay out cash toshareholders in the form of dividends. The chart to the right compares the firm's currentshare price with the path of Boston Beer's expected equity value per share over the nextthree years, assuming our long-term projections prove accurate. The range between theresulting downside fair value and upside fair value in Year 3 represents our bestestimate of the value of the firm's shares three years hence. This range of potentialoutcomes is also subject to change over time, should our views on the firm's future cashflow potential change. The expected fair value of $909 per share in Year 3 representsour existing fair value per share of $698 increased at an annual rate of the firm's cost ofequity less its dividend yield. The upside and downside ranges are derived in the sameway, but from the upper and lower bounds of our fair value estimate range.



Boston Beer receives a ValueRisk™ rating of MEDIUM based of the historicalvolatility of key drivers of economic value creation. The fair value range sets themargin of safety around our fair value estimate of the firm's shares.

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$1,159

$909

Current Share Price, $559

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Attractive

Technical Analysis

Technical Evaluation NEUTRAL Money Flow Index (MFI) OVERSOLD

30-week Price and Volume Chart (weekly)Relative Price Strength WEAK

5-week Company Performance -15.6%5-week Market Benchmark Performance 2.6%5-week Relative Performance vs. Market Benchmark -18.2%13-week Company Performance -45.7%13-week Market Benchmark Performance 7.5%13-week Relative Performance vs. Market Benchmark -53.2%30-week Company Performance -52.4%30-week Market Benchmark Performance 17.5%30-week Relative Performance vs. Market Benchmark -70.0%

Upside/Downside Volume BEARISH Timeliness Matrix™ Equity Valuation

Relative Strength

Firms that are undervalued and currently showing near-term pricing strength score near the top right of the matrix.

Boston Beer SAM FAIRLY VALUED

The firm's near-term moving average (5-week, grey line) and medium-term movingaverage (13-week, red line) are shown in the chart above. Typically, when a shorter-term moving average crosses a medium- or longer-term moving average from below, itrepresents a bullish signal. If the short-term moving average crosses from above, tradersoften view this as bearish. Boston Beer's 5-week moving average is below its 13-weekmeasure, indicating a bearish trend. However, the oversold position on the firm'sMoney Flow Index (MFI) indicates a short-term pop in the stock may be around thecorner. We're NEUTRAL on the firm's technicals for now.

The Money Flow Index (MFI) is an oscillator that uses price and volume to measurebuying and selling pressure. Chartists often look for overbought (above 80) andoversold (below 20) levels to warn of unsustainable near-term price extremes. BostonBeer's MFI of 4 indicates an OVERSOLD position and a high likelihood of a short-term pop in the stock. The firm's shares have fallen too far too fast. The MFI can alsobe used to gauge the strength or weakness of a firm's price trend. In Boston Beer'scase, we think its price has reached an unsustainable near-term price extreme,trumping the presence of any near-term divergences between its stock price andmoney flow action.

A firm's relative price strength can be assessed over any number of time horizons. Weshow the firm's performance over the past 5 weeks, 13 weeks, and 30 weeks below.In arriving at our relative strength rating for each company, we assess the past 13weeks, which includes the market's reaction to the firm's most recently reportedquarter, where applicable, and other more recent economic events. During the past 13weeks, Boston Beer's shares returned -45.7%, while the market benchmark returned7.5%. We think Boston Beer's 13-week relative price performance is WEAK.

In the chart above, we pinpoint the heaviest accumulation or distribution week of thefirm, determined by the week with the highest trading volume during the past 30 weeks.A heavy accumulation (buying) or distribution (selling) week often determines thefuture near-term direction of the firm's share price, as money managers continue tomove in or out of the stock in the days and weeks ahead driving the stock up or down,respectively. For Boston Beer, the week with the highest trading volume out of the last30 weeks was a week of heavy selling, or distribution (red bar). Such market activitycould indicate a reversal of an uptrend or further confirmation of a downtrend.

Overvalued Fairly Valued Undervalued

Estimated Fair Value Fair Value Range Investment Style Sector Industry $698.00 $506.00 - $890.00 MID-CAP BLEND Next Generation Disruptive Innovation

Weak 1Companies that are undervalued and showing near-term relative price strength couldrepresent timely buys, as the stock may be attractive to both value and momentuminvestors. A cross section of the firm's equity valuation and its relative share pricestrength is shown in the matrix above. We tend to prefer undervalued stocks that have strong pricing momentum, also called Valuentum stocks.

The level and trend of the Upside/Downside (U/D) volume ratio reveals whetherinstitutional participation has been bullish or bearish as of late. Boston Beer's U/Dvolume ratio of 0.3 is not only less than 1 but also is lower than its trailing average,indicating BEARISH institutional interest during the past several weeks.

Strong

Neutral


4695696697698699691,0691,1691,2691,369

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Stock Price 5276277278279271,0271,1271,227 Overbought Line

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Attractive

Pro Forma Income Statement -------------------- Historical --------------------

In Millions of USD (except for per share items)Dec-18 Dec-20

Total Revenue 996 1,736

Cost of Goods Sold 483 922

Selling, General and Administrative Expenses 396 566

Other Operating Expenses 0 0

Operating Income 117 248

Unusual items 0 0

Operating Income, including unusual items 117 248

Interest Expense 0 0

Other Non-operating Income 0 (4)

Pre-tax Income 117 244

Income Taxes 24 52

Income after tax 93 192

Minority Interest and Equity Income 0 0

Net Income, excluding extra items 93 192

Income Available to Common, excluding extra items 93 192

Diluted Earnings per Share, excluding extra items 7.64 15.63

Diluted Weighted Shares Outstanding 12.2 12.3

Source: Company Filings, Xignite, Valuentum Projections


---------- Projected ----------


1,250 2,526 3,165


0 0 0

636 1,323 1,645

468 812 1,010

0 0 0

146 390 510

146 390 510

(2) 0 0

1 0 0

34 78 102

144 390 510

0 0 0

110 312 408

110 312 408

110 312 408

11.9 12.2 12.0


9.24 25.65 33.91

Note: Pro forma data in discounted cash-flow valuation may reflect significant adjustments from GAAP accounting data, including cash (not effective) tax rates and other analytical adjustments on a backward-looking and forward-looking basis. No individual data, by itself, found in this report should be used to make any investment decision.



Attractive

Pro Forma Balance Sheet -------------------- Historical --------------------


AssetsTotal Cash (including marketable securities) 108 163Inventory 70 131Accounts Receivable 40 88Other Current Assets 13 31Total Current Assets 232 413

Gross Fixed Assets 734 1,062(Accumulated Depreciation) (344) (439)Net Property, Plant, and Equipment 390 623

Goodwill, Net 4 113Intangibles, Net 0 104Other Long-term Assets 15 127Total Assets 640 1,380

LiabilitiesAccounts Payable 47 122Other Current Liabilities 73 138Current Portion of Long-term Debt 0 0Total Current Liabilities 121 260

Long-term Debt 0 0Other Long-term Liabilities 59 163Total Liabilities 180 423

Preferred Stock 0 0

Shareholders' EquityCommon Stock and Additional Paid in Capital 406 600Retained Earnings 56 357Other Equity (1) 0Total Shareholders' Equity 460 957

Total Liabilities and Shareholders' Equity 640 1,380

Boston Beer SAM FAIRLY VALUED

---------- Projected ----------


Estimated Fair Value Fair Value Range Investment Style Sector Industry $698.00 $506.00 - $890.00 MID-CAP BLEND Next Generation Disruptive Innovation

106 188 23464 127 158

37 293 533

930 1,265 1,488(389) (535) (655)

12 31 31219 640 956

104 104 10478 127 127

541 730 833

113 113 113

76 180 216

1,054 1,714 2,133

181 310 349

104 131 1320 0 0

318 473 512

0 0 0138 163 163

572 600 600165 669 1,077

0 0 0

1,054 1,714 2,133

(2) (29) (56)736 1,240 1,622






Attractive

Pro Forma Cash Flow Statement -------------------- Historical --------------------


Cash from OperationsNet Income 93 192Depreciation and Amortization 52 66Deferred Income Taxes 14 0Operating Gains Or Losses 4 (5)Changes in Working Capital 0 0

Cash Flow from Operations 163 253

Cash from InvestingPurchase of Property, Plant, Equipment (55) (140)Other Investing Cash Flows 0 1Cash Flow from Investing (55) (139)

Cash from FinancingIssuance (Retirement) of Stock (66) 15Issuance (Retirement) of Debt (0) (1)Dividends Paid 0 0Other Financing Cash Flows 1 (1)Cash Flow from Financing (65) 13

Foreign Exchange 0 0

Net Change in Cash 43 127




---------- Projected ----------

56 96 1200 0 0

110 312 408

178 402 531

12 40 410 (46) (39)

(259) (203) (223)

(93) (203) (223)(166) 0 0

0 0 01 0 0

8 (69) (68)(0) 0 0

0 0 0

(72) 130 240

9 (69) (68)






Attractive

Disruptive InnovationDisruptive Innovation FAIRLY VALUED

Company Name TickerMarket Cap (USD-

mil) DCF Valuation ValueCreation™ ValueRisk™ ValueTrend™ Technicals Relative Strength

Beyond Meat BYND 7,011 FAIRLY VALUED VERY POOR HIGH POSITIVE BEARISH WEAK

Boston Beer SAM 6,871 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL WEAK

Carvana Co. CVNA 21,372 FAIRLY VALUED VERY POOR HIGH POSITIVE VERY BEARISH STRONG

CRISPR Therapeutics CRSP 7,865 FAIRLY VALUED VERY POOR HIGH NEGATIVE BEARISH WEAK

Crocs CROX 9,525 FAIRLY VALUED EXCELLENT HIGH NEGATIVE BULLISH STRONG

DocuSign DOCU 52,611 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE VERY BEARISH NEUTRAL

ETSY ETSY 29,423 FAIRLY VALUED EXCELLENT HIGH POSITIVE BULLISH STRONG

First Solar FSLR 10,378 FAIRLY VALUED VERY POOR MEDIUM NEGATIVE BULLISH STRONG

Fiverr International FVRR 5,929 FAIRLY VALUED VERY POOR MEDIUM POSITIVE BEARISH WEAK

GameStop GME 11,784 OVERVALUED EXCELLENT VERY HIGH NEGATIVE VERY BEARISH WEAK

Global Payments GPN 52,206 FAIRLY VALUED EXCELLENT LOW NEGATIVE NEUTRAL WEAK

IntercontinentalExchange ICE 66,689 FAIRLY VALUED EXCELLENT LOW NEGATIVE BULLISH NEUTRAL

JD.com JD 124,765 FAIRLY VALUED POOR MEDIUM NEGATIVE BULLISH STRONG

Lululemon LULU 55,059 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH STRONG

Mercadolibre MELI 93,682 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH STRONG

Monster Beverage MNST 50,498 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

NASDAQ NDAQ 33,037 FAIRLY VALUED EXCELLENT LOW POSITIVE BULLISH STRONG

Palo Alto PANW 45,204 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE NEUTRAL STRONG

Penn National PENN 11,247 FAIRLY VALUED POOR MEDIUM NEGATIVE BULLISH STRONG

Pinterest PINS 32,866 FAIRLY VALUED VERY POOR MEDIUM NEGATIVE BEARISH WEAK

Proto Labs PRLB 1,999 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Roku ROKU 41,488 FAIRLY VALUED VERY POOR MEDIUM POSITIVE BEARISH WEAK

ServiceNow NOW 131,649 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL STRONG

Slack Tech WORK 17,512 FAIRLY VALUED VERY POOR MEDIUM POSITIVE BULLISH STRONG

Snap SNAP 109,606 FAIRLY VALUED VERY POOR MEDIUM POSITIVE BULLISH STRONG

Splunk SPLK 24,783 FAIRLY VALUED GOOD MEDIUM NEGATIVE NEUTRAL STRONG

Stitch Fix SFIX 3,960 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Teradyne TER 22,335 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

Uber UBER 70,098 FAIRLY VALUED VERY POOR VERY HIGH POSITIVE BEARISH WEAK

VeriSign VRSN 25,504 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BEARISH WEAK

Verisk VRSK 33,942 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL STRONG

Virgin Galactic SPCE 5,561 FAIRLY VALUED POOR VERY HIGH NEGATIVE BEARISH WEAK

Wayfair W 26,700 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

Zoom Video ZM 90,828 FAIRLY VALUED GOOD MEDIUM POSITIVE BEARISH WEAK


We think the Disruptive Innovation industry is fairly valued at this time. The industry'smarket cap is trading between 80% and 120% of our estimate of its fair value based onour DCF process. Although we use a firm-specific ValueRisk™ measure to determinewhether a firm is undervalued or overvalued based on our DCF process, we consider anindustry to be undervalued if it is trading below 80% of our estimate of its fair valueand overvalued if it is trading at over 120% of our estimate of its fair value. We thinkthese fair value ranges are appropriate given the diversification benefits of holding abasket of stocks. Although there may be individual opportunities within the DisruptiveInnovation industry, we don't find the industry as a whole attractive based solely onvaluation.


MID-CAP BLEND ATTRACTIVE

LARGE-CAP GROWTH NEUTRAL

MID-CAP BLEND NEUTRAL

The above bar chart reveals the price/fair value of the company, its peers, and the industry as a whole.Shaded blue denotes that the firm has earned the highest rating for that respective category.Investment Style Relative Valuation

MID-CAP GROWTH NEUTRAL

LARGE-CAP VALUE ATTRACTIVE

MID-CAP BLEND UNATTRACTIVE

LARGE-CAP CORE NEUTRAL


LARGE-CAP BLEND UNATTRACTIVE




LARGE-CAP BLEND ATTRACTIVE

LARGE-CAP VALUE ATTRACTIVE

LARGE-CAP CORE ATTRACTIVE

LARGE-CAP BLEND ATTRACTIVE


SMALL-CAP VALUE ATTRACTIVE



LARGE-CAP GROWTH UNATTRACTIVE

LARGE-CAP GROWTH UNATTRACTIVE

LARGE-CAP BLEND NEUTRAL

MID-CAP BLEND UNATTRACTIVE









LARGE-CAP GROWTH ATTRACTIVE



80.1%91.0%

96.3%

0%

20%

40%

60%

80%

100%

120%

Boston Beer Peer Median Disruptive Innovation

Valuentum's Full Page Stock Report


BA

G

I

N

C

J

D

M

H

E

L

K

A DCF ValuationShows whether the firm is undervalued, fairly valued, or overvalued based on our DCF process and by how much.

B Valuentum Buying Index (VBI)Provides insight into the timeliness of an investment opportunity. We rank firms from 1 to 10 based on rigorous fiancial, valuation, and technical analysis. A 10 represents one of our top picks.

C Valuentum Value Rating (VVR) Indicates whether we think a firm is undervalued, fairly valued, or overvalued on the basis of our DCF process.

D Investment ConsiderationsEvaluates firms on 12 different measures, from the firm's growth and cash flow generation to the stock's money flow index and upside/downside volume. We reveal technical support and resistance levels.

E 30-week Price and Volume ActionDisplays the last accumulation or distribution week of the stock and historical price and volume action.

G Company VitalsShows sector,industry and other relevant company information.

H Business QualitySummary of the firm's ability to create value for shareholders compared wth the underlying risk of its operations.

I Normalized EPS and EBITDAEstimation of the firm's normalized earnings measures and the corresponding valuation mutliples.

J Investment HighlightsOur opinion of the company, including analysis of its financial and technical strengths and weaknesses.

K Relative ValuationComparison of the firm's PE, PEG, and Price/FV ratios versus peers.

L Returns Summary3-year averages of the firm's key return measures, including return on invested capital, with and without goodwill.

M Leverage, Coverage, and LiquidityA snapshot of the company's financial health.

N Financial SummaryA summary of the proforma financial statements found in the extended report.

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

UNDERVALUED

FAIRLY VALUED

OVERVALUED

• Revenue Volatility • Margin Volatility • Earnings Volatility • Cash Flow Volatility

About Valuentum

@Valuentum, we strive to stand out from the crowd. Mostinvestment research publishers fall into a few camps,whether it be value, growth, income, momentum, chartistor some variant of the aforementioned. We think each inits own right holds merit, but we think the combination ofthese approaches can be even more powerful. After all,stock price movements aren’t just driven by investors ofthe value or growth variety, but by all market participants.Therefore, we look at stocks from a variety of investmentperspectives in order to better understand and identifyideas. We want to provide relevant information.

The core of our process is grounded in rigorous discountedcash flow analysis and incorporates the concept of amargin of safety. We offer a fair value estimate for eachcompany and provide a relative valuation assessment inthe context of a company’s industry and closest peers. Across section of our ValueCreation™ and ValueRisk™ratings provides a financial assessment of a company’sbusiness quality, while our ValueTrend™ rating offersinsight into the trajectory of a firm’s economic profitcreation. The Economic Castle rating measures themagnitude of future economic value generation, and theDividend Cushion ratio assesses the financial capacity of acompany to keep raising its dividend.

Our analysis doesn’t stop there. We also offer a technicalevaluation of the stock as well as other momentumindicators. We not only want to reveal to readers whichfirms may be undervalued, in our view, but we also wantto provide readers with information to help them assessentry and exit points. Most research publishers focus onarriving at a target price or fair value estimate, but mayfall short of providing a technical assessment to bolsterbuy and sell disciplines. We strive to go the distance andprovide readers with answers--not half the story.

An explanation of our approach would not be complete ifwe didn’t describe our ideal stock idea. We’re lookingfor companies that are undervalued--both on a DCF basisand versus peers--have strong growth potential, have asolid track record of creating economic profits forshareholders with reasonable risk, are strong cash flowgenerators, have manageable financial leverage, and arecurrently showing bullish technical and momentumindicators. For dividend growth ideas, we look forcompanies that have both the capacity and willingness tokeep raising the dividend.

Can such stock ideas exist? Subscribe to Valuentum toreceive our best investment ideas and analysis onhundreds of stocks, dividends, ETFs and more.


Historical firm-specific financial data generates our ValueCreation™, ValueRisk™, and ValueTrend™ ratings. The data provides the basis for our financial forecasts. Full annual forecasts of income statement, balance sheet, and cash flow statement items. Firm-specific cost of equity, cost of debt, weighted average cost of capital, and long-term growth and profitability measures estimated.

A complete three-stage free cash flow to the firm valuation model generates an estimate of the firm's equity value per share based on estimated future free cash flows.The volatility of key valuation drivers are estimated and a margin of safety is determined.

The firm's stock price is compared to the suggested margin of safety. If a firm's stock price falls below the lower bound of our estimated fair value range, it receives Valuentum's highest Value Rating.

Financial Forecasts

Financial Statement Analysis

Discounted Cash Flow Valuation

ModelValueRisk™

Rating

Valuentum Value Rating (VVR)

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

Methodology for Picking Stocks - Valuentum Buying Index™ (VBI)

@ Valuentum, we like to look at companies from anumber of different perspectives. The Valuentum BuyingIndex (VBI) combines rigorous financial and valuationanalysis with an evaluation of a stock's technicals to derivea rating between 1 and 10 for each company. The VBIplaces considerable emphasis on a company's discountedcash-flow (DCF) valuation, its relative valuation versuspeers (both forward PE and PEG ratios), and its technicalsin order to help readers assess entry and exit points on themost interesting ideas.

Let's follow the red line on the flow chart below to seehow a company can score a 10, the best mark on the index(a "Top Pick"). First, the company would need to be'undervalued' on a DCF basis and 'attractive' on a relativevalue basis. The stock would also have to be exhibiting

'bullish' technicals. The firm would need aValueCreation™ rating of 'good' or 'excellent', exhibit'high' or 'aggressive' growth prospects, and generate atleast a 'medium' or 'neutral' assessment for cash flowgeneration, financial leverage, and relative price strength.

This is a tall order for any company. Stocks that don'tmake the cut for a 10 are ranked accordingly, with theleast attractive stocks, in our opinion, garnering a ratingof 1 ("We'd sell"). Most of our coverage universeregisters ratings between 3 and 7, but at any given timethere could be large number of companies garneringeither very high or very low scores, especially at marketlows or tops, respectively.

The Best Ideas Newsletter portfolio puts the VBI intopractice.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

DCF FairlyValued

DCF Undervalued

Relative ValueUnattractive/Neutral

Relative Value Attractive

Relative ValueUnattractive/Neutral


Technicals Bearish: 1

Technicals Neutral: 2

TechnicalsBullish: 4

Technicals Bullish: 7

TechnicalsBearish: 6

Technicals >= BullishValueCreation(TM) >= GoodGrowth >= HighCash Flow Generation >= MediumFinancial Leverage <= MediumRelative Strength >= Neutral

Final Score: 10



TechnicalsBearish: 3

Relative Value Unattractive/Neutral











Initial Index Score

DCF Overvalued

GlossaryEstimated Fair Value. This measure is our opinion of the fair equity value per share ofthe company. If our forecasts prove accurate, which may not always be the case, wemay expect a firm's stock price to converge to this value within the next 3 years.

Investment Style. Valuentum uses its own proprietary stock-classification system.Nano-cap: Less than $50 million; Micro-cap: Between $50 million and $200 million;Small-cap: Between $200 million and $2 billion; Mid-cap: Between $2 billion and$10 billion; Large-cap: Between $10 billion and $200 billion; Mega-cap: Over $200billion. Blend: Firm's that we think are undervalued and exhibit high growthprospects (growth in excess of three times the rate of assumed inflation). Value:Firm's that we believe are undervalued, but do not exhibit high growth prospects.Growth: Firms that are not undervalued, in our opinion, but exhibit high growthprospects. Core: Firms that are neither undervalued nor exhibit high growthprospects.

Fair Value Range. The fair value range represents an upper bound and lower bound,between which we would consider the firm to be fairly valued. The range considers ourestimate of the firm's fair value and the margin of safety suggested by the volatility ofkey valuation drivers, including revenue, gross margin, earnings before interest, andenterprise free cash flow (the determinants behind our ValueRisk™ rating).

DCF Valuation. We opine on the firm's valuation based on our DCF process. Firmsthat are trading with an appropriate discount to our fair value estimate receive anUNDERVALUED rating. Firms that are trading within our fair value range receive aFAIRLY VALUED rating, while firms that are trading above the upper bound of ourfair value range receive an OVERVALUED rating.

Company Vitals. In this section, we list key financial information and the sector andindustry that Valuentum assigns to the stock. The P/E-Growth (5-yr), or PEG ratio,divides the current share price by last year's earnings (EPS) and then divides thatquotient by our estimate of the firm's 5-year EPS growth rate. The estimatednormalized diluted EPS and estimated normalized EBITDA represent the five-yearforward average of these measures used in our discounted cash flow model. The P/Eon estimated normalized EPS divides the current share price by estimated normalizeddiluted EPS. The EV/estimated normalized EBITDA considers the current enterprisevalue of the company and divides it by estimated normalized EBITDA. EV is definedas the firm's market capitalization plus total debt, minority interest, preferred stockless cash and cash equivalents.

Relative Value. We compare the firm's forward price-to earnings (PE) ratio and itsprice/earnings-to-growth (PEG) ratio to that of its peers. If both measures fall below thepeer median, the firm receives an ATTRACTIVE rating. If both are above the peermedian, the firm receives an UNATTRACTIVE rating. Any other combination resultsin a NEUTRAL rating.

ValueCreation™. This is a proprietary Valuentum measure. ValueCreation™indicates the firm's historical track record in creating economic value for shareholders,taking the average difference between ROIC (without goodwill) and the firm'sestimated WACC during the past three years. The firm's performance is measured alongthe scale of EXCELLENT, GOOD, POOR, and VERY POOR. Those firms withEXCELLENT ratings have a demonstrated track record of creating economic value,while those that register a VERY POOR mark have been destroying economic value.

Business Quality Matrix. We compare the firm's ValueCreation™ and ValueRisk™ratings. The box is an easy way for investors to quickly assess the business quality ofa company. Firms that generate economic profits with little operating variabilityscore near the top right of the matrix.

Timeliness Matrix. We compare the company's recent stock performance relative tothe market benchmark with our assessment of its valuation. Firms that areexperiencing near-term stock price outperformance and are undervalued by ourestimate may represent timely buys.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

ValueRisk™. This is a proprietary Valuentum measure. ValueRisk™ indicates thehistorical volatility of key valuation drivers, including revenue, gross margin, earningsbefore interest, and enterprise free cash flow. The standard deviation of each measure iscalculated and scaled against last year's measure to arrive at a percentage deviation foreach item. These percentage deviations are weighted equally to arrive at thecorresponding fair value range for each stock, measured in percentage terms. The firm'sperformance is measured along the scale of LOW, MEDIUM, HIGH, and VERY HIGH.The ValueRisk™ rating for each firm also determines the fundamental beta of eachfirm along the following scale: LOW (0.85), MEDIUM (1), HIGH (1.15), VERY HIGH(1.3).

Range of Potential Outcomes. The firm's margin of safety is shown in the graphicof a normal distribution. We consider a firm to be undervalued if its stock price fallsalong the green line and overvalued if the stock price falls along the red line. Weconsider the firm to be fairly valued if its stock price falls along the yellow line.

Return on Invested Capital. At Valuentum, we place considerable emphasis onreturn on invested capital (both with and without goodwill). The measure focuses onthe return (earnings) the company is generating on its operating assets and is superiorto return on equity and return on assets, which can be skewed by a firm's leverage orexcess cash balance, respectively. ValueTrend™. This is a proprietary Valuentum measure. ValueTrend™ indicates the

trajectory of the firm's return on invested capital (ROIC). Firms that earned an ROIClast year that was greater than the 3-year average of the measure earn a POSITIVErating. Firms that earned an ROIC last year that was less than the 3-year average of themeasure earn a NEGATIVE rating.

Technical Evaluation. We evaluate a firm's near-term and medium-term movingaverages and money flow index (MFI) to assign each firm a rating along thefollowing scale: VERY BULLISH, BULLISH, NEUTRAL, BEARISH, and VERYBEARISH.

Cash Flow Generation. Firms' cash flow generation capacity are measured along thescale of STRONG, MEDIUM, and WEAK. A firm with a 3-year historical free cashflow margin (free cash flow divided by sales) greater than 5% receives a STRONGrating, while firms earning less than 1% of sales as free cash flow receive a WEAKrating.

Stock Price Relative Strength. We assess the perfomance of the company's stockduring the past quarter, 13 weeks, relative to an ETF that mirrors the aggregateperformance of constituents of the stock market. Firms are measured along the scaleof STRONG, NEUTRAL, and WEAK. Companies that have outperformed themarket index by more than 2.5% during this 13-week period receive a STRONGrating, while firms that trailed the market index by more than 2.5% during this 13-week period receive a WEAK rating.

Financial Leverage. Based on the firm's normalized debt-to-EBITDA metric, we rank firms on the following scale: LOW, MEDIUM, and HIGH. Companies with a normalized debt-to-EBITDA ratio below 1.5 receive a LOW score, while those with a measure above 3 receive a HIGH score.

Money Flow Index (MFI). The MFI is a technical indicator that measures buyingand selling pressure based on both price and volume. Traders typically use thismeasure to identify potential reversals with overbought and oversold levels. We use a14-week measure to rank firms along the following scale: EXTREMELYOVERBOUGHT (>90), OVERBOUGHT (80-90), NEUTRAL (20-80), OVERSOLD(10-20), EXTREMELY OVERSOLD (0-10).

Upside/Downside Volume. Heavy volume on up days and lower volume on down days suggests that institutions are heavily participating in a stock's upward advance. We use the trailing 14-week average of upside and downside volume to calculate an informative ratio. We rank each firm's U/D volume ratio along the following scale: BULLISH, IMPROVING, DETERIORATING, and BEARISH.

SAM Rating History Price Fair Value VBI6-Sep-21 $559.40 $698.00 520-Nov-20 $938.30 $949.00 621-Aug-20 $883.25 $711.00 57-Feb-20 $363.52 $348.00 33-May-19 $333.87 $243.00 421-Jan-19 $243.12 $191.00 317-Aug-18 $291.10 $175.00 413-Apr-18 $212.65 $150.00 415-Dec-17 $187.45 $146.00 418-Aug-17 $146.00 $135.00 617-Apr-17 $139.05 $135.00 39-Dec-16 $173.55 $149.00 68-Jul-16 $171.13 $149.00 712-Feb-16 $185.04 $160.00 3

Disclosures, Disclaimers & Additional SourcesTo send us feedback or if you have any questions, please contact us at [email protected]. We're always looking for ways to better serve your investment needs and improve our research.

Copyright (c) 2017 by Valuentum, Inc. All rights reserved.No part of this publication may be reproduced in any form or by any means.The information contained in this report is not represented or warranted to be accurate, correct,complete, or timely. This report is for informational purposes only and should not be considered asolicitation to buy or sell any security. No warranty or guarantee may be created or extended bysales or promotional materials, whether by email or in any other format. The securities or strategiesmentioned herein may not be suitable for all types of investors. The information contained in thisreport does not constitute any advice, especially on the tax consequences of making any particularinvestment decision. This material is not intended for any specific type of investor and does nottake into account an investor's particular investment objectives, financial situation or needs. Thisreport is not intended as a recommendation of the security highlighted or any particular investmentstrategy. Before acting on any information found in this report, readers should consider whethersuch an investment is suitable for their particular circumstances, perform their own due-diligence,and if necessary, seek professional advice. The sources of the data used in this report are believed by Valuentum to be reliable, but the data’saccuracy, completeness or interpretation cannot be guaranteed. Assumptions, opinions, andestimates are based on our judgment as of the date of the report and are subject to change withoutnotice. Valuentum is not responsible for any errors or omissions or for results obtained from the useof this report and accepts no liability for how readers may choose to utilize the content. In no eventshall Valuentum be liable to any party for any direct, indirect, incidental, exemplary, compensatory,punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, withoutlimitation, lost income or lost profits and opportunity costs) in connection with any use of theinformation contained in this document. Investors should consider this report as only a single factorin making their investment decision. Valuentum is not a money manager, is not a registered investment advisor, and does not offerbrokerage or investment banking services. Valuentum has not received any compensation from thecompany or companies highlighted in this report. Valuentum, its employees, independentcontractors and affiliates may have long, short or derivative positions in the securities mentionedherein. Information and data in Valuentum’s valuation models and analysis may not capture allsubjective, qualitative influences such as changes in management, business and political trends, orlegal and regulatory developments. Redistribution is prohibited without written permission. Readersshould be aware that information in this work may have changed between when this work waswritten or created and when it is read. There is risk of substantial loss associated with investing infinancial instruments. Valuentum's company-specific forecasts used in its discounted cash flow model are rules-based.These rules reflect the experience and opinions of Valuentum's analyst team. Historical data used inour valuation model is provided by Xignite and from other publicly available sources includingannual and quarterly regulatory filings. Stock price and volume data is provided by Xignite. Nowarranty is made regarding the accuracy of any data or any opinions. Valuentum's valuation modelis based on sound academic principles, and other forecasts in the model such as inflation and theequity risk premium are based on long-term averages. The Valuentum proprietary automated text-generation system creates text that will vary by company and may often change for the samecompany upon subsequent updates. Valuentum uses its own proprietary stock investment style and industry classification systems. Peercompanies are selected based on the opinions of the Valuentum analyst team. Research reports anddata are updated periodically, though Valuentum assumes no obligation to update its reports,opinions, or data following publication in any form or format. Performance assessment ofValuentum metrics, including the Valuentum Buying Index, is ongoing, and we intend to updateinvestors periodically, though Valuentum assumes no obligation to do so. Not all information isavailable on all companies. There may be a lag before reports and data are updated for stock splitsand stock dividends. Past simulated performance, whether backtested or walk-forward or other, is not a guarantee offuture results. For general information about Valuentum's products and services, please contact usat [email protected] or visit our website at www.valuentum.com.

The High Yield Dividend Newsletter portfolio, the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Any performance, including that in the Nelson Exclusive publication, is hypothetical and does not represent actual trading. Past performance is not a guarantee of future results.

Valuentum is an investment research publishing company.

Valuentum has not owned and does not own any shares of stocks mentioned on its website or in this report. President of Investment Research Brian Nelson does not own any shares of stocks mentioned on Valuentum's website or in this report. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account.

If an independent contributor or employee mentions a stock he or she owns, we disclose it in the article/report that mentions the security. Please view individual articles on Valuentum's website for additional disclosures. Contact us to learn more about Valuentum's editorial policies.

boston beer sam fairly valued buying index™ 5 value rating

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