New Age Beverages stock had the MACD go positive over the last couple of days on a huge news story that’s been buried in the slew of negative headlines over the last few days.
New Age Beverages announced on April 24, 2018, the distribution expansion of its full portfolio of beverages rolling out across 83,996 points of distribution in 30,060 stores nationally in the 2nd quarter alone. The distribution is expected to conservatively contribute more than $20 million annually based on current blended sales per point of distribution of the different brands in New Age’s portfolio.
The distribution expansion is only in traditional convenience, grocery, and pharmacy retail and does not include New Age’s development of foodservice and alternative channels with new partners Dot Foods, Simple Again, and the Unified Strategies Group.
Michael Cunningham, Senior Vice President of Sales of New Age Beverages said, “With our rate of sales across each brand within the portfolio, the new distribution is expected to conservatively add $20 million to our annual revenue from June going forward, and we don’t expect to stop there. We know we have major potential for further national retail, alternative channel and foodservice expansion, and expect to continue to add further incremental national distribution throughout the remainder of 2018.”
Management is making big moves to expand in locations around the world. So far in 2018, management has been on fire. Check out some of these headlines:
January 11, 2018: NEW AGE BEVERAGES CORPORATION EXPANDS XINGTEA BRAND WITH CVS HEALTH THROUGHOUT THE UNITED STATES ACROSS INITIAL 3,000 OUTLETS
January 18, 2018: New Age Beverages Expands Distribution of Their Entire Healthy Portfolio Worldwide With the US Military
January 26, 2018: New Age Beverages Begins Shipments Nationally of Its New Organic Coco-Libre Sparkling Coconut Water, the First of Its Type Worldwide
January 29, 2018: New Age Beverages Corporation Forms Partnership With Simple Again to Provide Healthy Portfolio to 3,000 Juice Bars and Health Clubs Throughout the US
February 1, 2018: New Age Beverages Corporation Expands Portfolio With Loblaws and Sobeys, the Largest Grocery Chains Across Canada
February 13, 2018: New Age Beverages Corporation Signs Major Distribution Agreement To Expand Its Búcha Live Kombucha Brand To All Major Retail Outlets Throughout South Korea
April 24, 2018: NBEV Announces Expansion of its Healthy Beverage Portfolio Across the US with >80,000 New Distribution Points in >30,000 Stores Contributing >$20 Million in Annual Revenue
The CEO is Brent Willis and I really like this guy. Brent is a genius. Just about 2 years ago, he took over the failing New Age Beverages. The company had just one product with more than 25 ingredients that were hard to get and so the product was hard to manufacture. The company had just one customer and about $2 million in annual sales. The stock was an OTCBB stock that traded at $0.19 with no liquidity at all. Who would want to own a dog company like this? Brent turned this company around in less than 2 years and he shares at BevNET exactly how he did it. Today, New Age Beverage is now the 54th largest beverage company in the world. It’s the 8th largest health beverage company. And more importantly for us traders, it’s the fastest growing beverage company in the world. This is a phenomenal story that will give you a good idea of the guy, this genius, that runs this company. Check it out:
In the Q&A part of the presentation, Brent Willis admits that he doesn’t like the public stock side of the business. He admits that he’s not doing things like getting friendly with institutional investors and pitching the company to fund managers because he likes focusing on the business. Brent says he believes New Age Beverages’ stock is not trading in-line with the value of its pears because he’s not doing his public company pitch job as CEO. Guys good at running a business are often not good at the stock side of the equation, just like guys good at stock trading may know nothing about running a business. I don’t see this as a problem.
New Age Beverages did a stock offering earlier this month to raise cash. The underwritten public offering was for 2,285,715 shares of its common stock at a price to the public of $1.75 per share. The company likely raised about $3.5 million after expenses. I have no problem with this stock offering as the company likely needs capital to increase inventory as a result of the new distribution agreements it has signed.
NBEV stock currently trades at around $1.75. It has market cap of $68.4 million. The company did $51.5 million in sales last year. If you add $20 million to 2018 sales as a result of the April 24, 2018, major distribution expansion, the company should do at least $71 million in sales in 2018 which is in-line with the current market cap. I like buying companies where the market cap is at or below annual sales because it suggests I’m not overpaying for future growth.
New Age Beverages stock trades at a price to book ratio of 1.08. The industry (Malt Beverages) average price to book ratio is 5.45. NBEV stock is cheaper than 88% of the companies listed in the same industry.
New Age Beverages is rapidly growing revenue.
Revenue has grown by an incredible 106.26% in the past year! This is very strong growth! Measured over the past 5 years, revenue has been growing by an eye-popping 127.85% on average per year.
I think NBEV stock is a buy and analysts agree. Overall there are no sell ratings, no hold ratings, and 3 buy ratings on the stock. The average analyst price target is $6.25 which represents a jaw-dropping 255% upside from the current price.
NBEV stock is in a basing pattern. Nothing looks too special about the stock other than the MACD quietly going positive. This is a fairly thinly traded stock with an average daily volume of 451K. Ironically, it’s the more liquid large cap stocks that have recently been crushed as a result of the rising 10 year yield.
Trading volume is increasing in NBEV stock after the most recent drop and share offering. An increase in volume like this can signal that a big upward move is coming.
Disclosure: As Premium members know, I went long NBEV stock today.
New Age Beverages In The News
[financial_news symbol=”nbev” source=”yahoo,seekingalpha” template=”basic” items=”10″]