Is This Beverage Company The Right Penny Stock To Buy?

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Penny Stock Research
Is This Beverage Company The Right Penny Stock To
Buy?
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• Hi, My name is Aaron and Im with Penny Stock
  Research, today were reviewing our recently
  published article

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• Is This Beverage Company The Right Penny Stock To
  Buy?

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• Picking the right penny stock to buy can be a
  tough decision. After all, penny stocks are
  priced so low for a reason. The key is to
  determine if the company is just cheap because
  its new or

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• developmental and not because of some major
  flaw. When it comes to picking a good penny
  stock, it often makes a lot of sense to look at
  the industry itself.

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• A rapidly growing industry can do wonders for
  just about any company in it. And, if you can
  combine a good company with a growing industry,
  well lets just say its a very good mix of
  factors.

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• Thats why I really like beverage company Castle
  Brands ROX. Not only is the company
  impressively growing revenues, but the industry
  itself is also quickly gaining popularity.

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• More specifically, ROX develops and sells
  alcoholic beverages worldwide. The companys
  products include rum, whiskey, ginger beer,
  vodka, and others.

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• ROXs biggest sales come from bourbon, Irish
  whiskey, rum, and ginger beer.
• Heres a look at what ROX has done over the last
  year

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• ROX was trading in tight range until the August
  stock market selloff. Since then, the share
  price has recovered and is now trading above the
  50-day moving average. The stock is still about
  40 from the 52-week high.

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• So why is ROX the right penny stock to buy?

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• As I said earlier, ROX has the advantage of being
  a strong company in a growing industry. From a
  company-specific perspective, Castle has the
  fastest growing small-batch bourbon in the US.

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• They also have the largest selling premium ginger
  beer in the US. Plus, ROXs Irish whiskeys are
  growing rapidly. From an industry perspective,
  small-batch and small label alcohol sales are
  exploding in the US.

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• All you have to do is look at the alcohol shelf
  in any grocery store and you can see just how
  many brands are out there and how many labels
  are from some small brewery or distillery.

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• Lets look at some company specifics.

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• First off, in 2013 ROX had revenues of 41.4
  million. In fiscal 2015, that number grew to
  75.5 million. Thats an impressive 39 increase.

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• Basically, even though revenue grew rapidly,
  costs remained controlled. Thats why profits
  rose at a faster rate than revenues.

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• Whats more, in the first quarter of fiscal 2016,
  revenues increased 38 year over year. More
  importantly, EBITDA improved to 0.6 million from
  a loss a year ago.

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• Growth was driven by a 106 increase in whiskey
  sales, 12 increase in rum sales, and 40 rise in
  ginger beer sales.
• And thats not all

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• ROX management has said for public drink
  companies, enterprise value to annual revenue
  ratios usually are about 5-6x. At the current
  price, ROX is trading at just 3.3x, well below
  the typical floor for this metric.

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• So to summarize, we have a rapidly growing
  industry with a company seeing its own amazing
  growth. And, that company is trading well below
  the valuation comparables in its industry. Sounds
  like a great opportunity to me!

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