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

January 2, 2001

It looks like RKY may have encountered the top of its recent rally with resistance near the $80 mark. Although light selling accompanied today’s slide, the actual fall was very sharp. This could indicate that most of the volume was on the sell-side and that buyers are no longer willing to purchase shares at current prices. Additionally, a swift pullback in the Standard and Poor’s 500 Index created selling pressure on many defensive stocks. With this in mind, our stop of $78 looked to be well positioned.

Picked on December 7th @ $76.56
Profit/Loss = +1.44 (+2%) (Stopped Tuesday @ $78.00)
Best Profit = +5.75 (+8%)

December 31, 2000

To grow profitably in key markets, Coors has invested in highly targeted advertising, innovative packaging, and creative promotions designed to bolster its brand value. The result? Coors is now the best selling beer in Puerto Rico and the second best selling beer in Canada. What’s more, RKY shares continue to make new highs. Closing the week with an intraday run to an all time new high of $82.31, RKY remains poised for an advance to $85. However, the stock is showing that plenty of intraday resistance lies ahead of this mark. Keeping this in mind, we’ll look for the stock to face an initial challenge at the two previous highs of $81.44 and $82.31. Tougher opposition will follow at $85 and $90. We’ll look for entry points if shares can advance through resistance on volume of 390,000 shares or better. Nevertheless, conservative traders may want to wait for the stock to close above resistance, confirming a breakout, prior to opening plays. Other entry signals will come when the stock can bounce sharply from support on good mid-day volume of 190,000 shares or greater. With that said, look for good support bases to come at $80 and further down at $79, bolstered by a previous top and the 10-dma of $78.59. If shares break through these key support levels, our stop at $78 will lock in our gains.

Picked on December 7th @ $76.56
Change since picked +3.75
Stop Loss @ $78.00