After recently announcing two new distribution contracts, the stock price of Celsius Holdings (CSUH.ob) is slipping back into the mid teens after trading at it's 52-week high of twenty cents. Any price below that number offers a good buying opportunity for those that wish to speculate on a good company with a great product.
Celsius Holdings is the maker of the world's first calorie burning beverage and offers the drink, simply called Celsius, in five carbonated flavors and two Green Tea flavors. Additionally, the company just launched the powdered version of the drink, which mixes with water, and the launch of the Celsius 'Energy Shot' is pending.
After long relying on word-of-mouth advertising Celsius is featured in a radio ad campaign in the northeast and a television spot is in the works. In addition to the paid-for advertising, some television stations in Philadelphia and Miami have highlighted the product in the health segments of their local news programs and a member of Katie Holmes' entourage was spotted sporting a bottle earlier this year. If an 'A-list' star ever promotes the drink things could get going in a hurry.
The increased awareness campaign seems to be paying dividends as Celsius reported nearly one million dollars in revenue last quarter and, with increased distribution and product awareness, that number could double by next quarter.
CEO Steve Haley leads an ambitious and quality management team which recently gained the support of Carl DeSantis, a deep-pocketed pioneer of the nutritional supplement business who has offered leadership and much needed capital to the company.
While trading at these levels Celsius is a great risk-reward play.
Consumer awareness is still growing and the stock has the potential to realize significant gains moving forward.
The downside with CSUH.ob is still minimal while trading in the teens, but if next quarters numbers show the significant gains in revenue of last quarter, twenty cent trading could become a distant memory.
That being said, there is always the risk that the Celsius product fails to catch on in the mainstream and the company can go bust.
For less than twenty cents, however, the potential of the product outweighs the risk of failure.
I'm a fan of the Celsius drink as well of the stock and although I'm set with my position in the stock, I will add on any significant dips.
Disclosure: VFC is long CSUH.ob.
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