RKY, a holding Co. for Coors Brewing Co., produces, markets and sells high-quality malt-based beverages. For the 39 weeks ended 9/24/00, net sales increased 8% to $1.68B. Net income increased 22% to $97.7M. Revenues benefitted from unit volume increases, higher prices and a shift towards higher net product sales. Net income also reflects increased investment income, lower debt balances and reduced state tax rates.

December 10, 2000

Coors has increased its beverage sales to almost twice the industry average through an emphasis on marketing. Additionally, the company’s introduction of a new long neck bottle for its Original Coors has turned the tide of declining sales for that particular brand. On Friday, RKY gave back some of its gains achieved on Thursday in conjunction with its breakout move. However, this retracement may provide us with a good opportunity to purchase the stock before another breakout. Keep stops at $72 to protect against declines through support. On the upside, we’ll look for a close above Thursday’s all time high of $77.06 to signal additional entry points and conformation of another potential breakout. Further up, we’ll look for the $80 mark to present a much tougher challenge to the stock. Since RKY is in a consumer cyclical sector, shares have been getting a boost from a broader market decline. With this in mind, we’ll look for continued weakness in the Dow Jones Industrial Average (INDU) or the NASDAQ Composite Index (COMPX) to be a continued sign of strength for the stock.

Picked on December 7th @ $76.56
Change since picked –1.56
Stop Loss @ $72.00

December 21, 2000

Product expansion into new markets has been an important factor for RKY’s steady double-digit earnings growth. To maintain this strategy, the company is putting emphasis on its fastest growing and farthest reaching Coors Light brand. With good market share in the light-beer category, steady shipments of Coors Light should help foster continued growth over the next several quarters. As for our play, RKY shares have begun to trend lower over the past couple of days, but have still managed to hold above strong support at $75. Today’s sharp intraday bounce off $75 gives us some encouragement of a short-term reversal forming at this level. To confirm this notion, we’ll need for volume of at lest 350,000 or better to accompany the stock higher. Should this scenario come to fold, we’ll look for resistance to come at $78 (previous support). Secondary resistance will be tougher at the all time high of $79.50 and higher up at $80. Entries will be signaled when strong volume can accompany the stock through resistance. Our stop at $72 will protect us against further losses, should the stock fall through support. Remember to look for potential entries when good mid-day volume of 175,000 shares can follow a sharp reversal off support.

Picked on December 7th @ $76.56
Change since picked –0.69
Stop Loss @ $72.00

December 19, 2000

Simply put, Coors is benefiting from healthy industry conditions and a new appreciation for defensive stocks. The company’s dependable double-digit earnings growth and its resistance to a slowing economy have made it a safe haven for investors. Currently, RKY is up over 100% since early March, while the NASDAQ Composite Index is down by roughly 50%. During today’s trading session, the stock botched an intraday attempt to overtake the all time high of $79.50, but still managed to inch higher to close at $78.81. If history is any indication of the future, then more selling throughout the broader markets may keep shares trending higher. If this scenario unfolds, then look for tougher challenges to come higher up at $80 and $85. For support, we’ll anticipate an intraday base to come at the $78 mark. The 10-dma of $76.34 will add a stronger base to previous highs near $76. Further support will come just lower at $75, bolstered by the 20-dma of $75.65. Each of these levels will present good entry points, should the stock reverse sharply from them on good volume. However, if shares happen to break through these major support levels and continue lower, we feel that a stop at $72 will protect us against further weakness.

Picked on December 7th @ $76.56
Change since picked +2.25
Stop Loss @ $72.00

December 17, 2000

The domestic beer industry continues to benefit from a favorable pricing environment, as witnessed by RKY's successful implementation of price hikes and a reduction in discounting over this last year. Coors employed these price hikes over 75% of the country, which has helped to keep the stock on a steady upward climb ever since early March. On Friday, the stock gained $3.50, or 4.64%, on great volume of 839 thousand shares. Coors bucked the trend of the broader markets on Friday, exemplifying the reasons behind owning defensive plays in this turbulent market environment. As for our next resistance point, we'll be expecting an intraday challenge at the all time high of $79.50. Tougher opposition should follow just higher at $80 and then $85. Without any previous support or resistance levels in new territory, we'll use increments of $5 to approximate future resistance. Support should come in at the previous all time high of $77.06, where many traders may be looking to pick up shares. Further down, we'll look to the $75 mark, bolstered by the 20-dma of $74.99, to provide a firmer foothold. Look for potential entries should the stock bounce sharply off either of these levels on good volume of 400 thousand shares or more. We'll keep stops at $72 to protect against further declines.

Picked on December 7th @ $76.56
Change since picked +2.44
Stop Loss @ $72.00