One to keep an eye on:
It's still early in 2014, but Celsius Holdings (CELH) is shaping up as a solid candidate for the 'Comeback Player of the Year'.
Celsius, the maker of the Celsius calorie-burning beverage, looks to have stabilized its domestic revenue stream just as encouraging signs are emerging overseas. The boost in publicity and sales numbers has slowly led to an uptick in trading volume over the past couple of quarters, an indication that investors may be slowly discovering this company's potential as a growth or 'second chance' play.
The latest quarterly and full-year reports support that theory. Revenue has stabilized to the point where the fourth quarter 2013 number came in at $2.9 million, capping off a record year of $10.6 million for the company. Significantly, these numbers were achieved without the expensive marketing campaigns of the past that ate away at previous profits, although net losses and expenditures were also on the rise. Notably, international sales look to be picking up steam, too, and profit margins are on the rise - which sets a solid foundation for future growth.
The international growth trend is particularly worth watching.
Celsius announced earlier this year that it had started production of its calorie-burning beverages in Dusseldorf, Germany, a location that provides a solid basing point into the European, African and Middle Eastern markets. Further international pushes are expected into Brazil and China later on down the road, too, according to statements released by the company. Brazil is an intriguing possibility at the current time, as a tad bit of promotion down there may be able to capitalize on the buzz surrounding the upcoming World Cup, to be followed by the Summer Olympics a couple of years later.
On the domestic front, Celsius is moving into the high-speed world of NASCAR, targeting an entirely different consumer base than those reached by the 'Dancing With the Stars' publicity when middle-aged-mom magnet Mario Lopez led the Celsius campaign trail. Two sponsorship deals have been announced of late, the second of which brought with it a five-fold spike in volume on the day the news was released. The adrenaline rush of racing engines and high speeds may be more of a natural fit for the energized Celsius drink than the campaigns of the past, which at one time included sponsorship of a hockey team.
As the rebound and growth story plays out, however, there is some reason for pause - as there always is when dabbling in the highly speculative world of small and micro-cap OTC investing. Celsius has pushed forward numerous marketing campaigns in the past, none of which have caught on with any vigor. Although offered as a healthy alternative (sugar free and containing numerous vitamins and minerals) to existing sugary sodas and energy drinks, Celsius still faces an uphill battle while battling for publicity against Monster and Five Hour Energy drinks, for example. Even the niche - yet loyal - fan base has yet to return numbers significant enough to push shares back towards the dollar mark, even with a previous push into retail and wholesale outlets such as 7-Eleven, Wal-Mart and Costco.
That said, the speculative market is all about measuring the risk vs. the reward. With as speculative a market cap and price offered by CELH at the current time, the more speculative investors may be ready to jump in and follow the growth story, as evidenced by the recent volume spike we've seen. December was a particularly noteworthy month in terms of volume and CELH shares tripled at one point last year to the sixty cent range, before settling back down to their current levels. Because CELH is still lightly-traded and carries that still-speculative label, even modest gains in the domestic and/or international sales arena could lead to a swift spike in share price, especially if volume continues to swoop in.
A quick glance at the numbers over the previous two years demonstrates the stability and initial stages of growth that could propel shares higher:
Q4 2013 - $2.9
Q3 2013 - $2.3
Q2 2013 - $3.0
Q1 2013 - $2.34
Q4 2012 - $1.93
Q3 2012 - $1.4
Q2 2012 - $1.8
Q1 2012 - $2.5
Volume and price have both been on the rise during the current trading week, and those looking for a speculative longer term growth story - and potentially those looking for a shorter term trade, too - may figure it's worth taking a look at Celsius Holdings.
Disclosure: Long CELH.
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