March 31, 2007
Lets all drink Jones Soda! Its a buy!
Jones Soda began as a garage company that made carbonated drinks for trend setters, environmentally friendly and "cool" clients. The sodas now sell in places such as Target and Starbucks. Gone are the days of Coca-Cola and Pepsi. Today’s youth (and adults!) are finding themselves apt to try “alternative beverages”, that is, soft drinks, with and without carbonation, in an effort to expand their pallets’ beyond the status quo. Jones Soda Co. is one of the smallest, yet fastest growing producers in the alternative beverage market. With the highest gross margin’s in the industry, great management, no debt, and an enterprise value of less than $600 MM, JSDA is an ideal acquisition for one of the major beverage makers.
With a notable increase in volume, it is becoming increasingly apparent that a takeover may be approaching. There have been a number of big hedge funds buying up with the stock with block trades of thousands of shares coming in every hour of the trading day. Even without the acquisition of JSDA, their cashflow, nonexistent debt, stellar management, percentage held by insiders and growth targets are ideal for any small-cap company.
• Gross Margin (39.21%)
• Recently Announced Wal-Mart contract
• Very attractive take-over candidate
• Growth (180% Next year, 30% per annum for the next 5 years)
• Cash-to-debt ratio
o P/E (106.45)
o Small-Cap volatility
o Limited product lines, multitude of competitors
Copyright © Eric Medina
Posted by eamed at March 31, 2007 01:53 PM