Castle Brands Inc. (NYSE:ROX)
Castle Brands Inc. (NYSE:ROX) wasted no time in promoting their brand after the company reached an agreement to supply Goslings Stormy Ginger Beer and Goslings Stormy Diet Ginger Beer to all U.S. Walmart stores. ROX shares closed Friday at $0.99 and have hit $1.15 in today’s trading after gapping up to open at $1.10. Volumes are huge. The listed average daily volume for ROX is just over 557,000 shares. Before lunch ROX shares have traded over 3 million shares.
This is likely the result of a presentation by Castle Brands Inc. (NYSE:ROX) to the 29th annual Roth Capital Partners, LLC Conference being held at the Ritz-Carlton in Laguna Niguel, CA. The company pointed out in the presentation that YoY revenues increased 9.1% from 2015 to 2016. That translated into a $30.3 million profit – an increase of 14.1% YoY. Of special note was the firm’s valuation. Castle Brands Inc. (NYSE:ROX) trades at 2.7 times revenues. However, a management pointed out, public drinks companies often trade at 5-6 times revenues and acquisition of beverage companies are made at even higher valuations. Accordingly, as presented, Castle Brands Inc. (NYSE:ROX) is currently trading at around a 60% discount to industry multiples. Directors and officers own 41% of Castle Brands Inc. (NYSE:ROX) which gives them a strong motive to increase shareholder value.
The New York, NY-based Castle Brands Inc. (NYSE:ROX) has had increasing sales every year since 2012 when the company reported $35.5 million in sales. ROX EPS has been marginally negative for the past five years and in each of the last two years shareholders of Castle Brands Inc.’s (NYSE:ROX) experienced an EPS loss of $0.02.
|Last Price a/o 12:12 AM EST||$ 1.12|
|Market Cap (mlns)||$ 161.01|
|Shares Outstanding (mlns)||162.46|
|Share Float (mlns)||85.57|
|Short Interest Ratio||1.75|
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.
About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.