Insider Financial
Pulse Beverage MOMENTUM & GROWTH
Pulse Beverage Corp (OTCMKTS:PLSB) Is Running On New Acquisitions
ByJarrod WessonPosted on March 12, 2018 COMMENTS
The share price of Pulse Beverage Corp (OTCMKTS:PLSB) is showing signs of trading higher after coming under immense selling pressure from short sellers. In addition, while the stock is still languishing at all-time lows, the recent amount of trading volume continues to fuel the strong belief that the stock could have already bottomed out.
Cabana - Pulse Beverage Corp OTCMKTS:PLSB
Cabana – Pulse Beverage Corp OTCMKTS:PLSB
Both the operating performance and the financial decisions of the management indicate that the market interest should be coming back to this ticker. While reducing its long-term debt, PLSB is expanding its distribution network. Now, its Natural Caba-Na® Coconut Waters is also sold Through Bashas’ and Food City in Arizona.
In addition, it is quite interesting that the company, in February, opted to increase the number of authorized shares from 5 billion to 10 billion. Is the company expecting to execute a new acquisition to enhance shareholder value?
In this piece, we will review these recent announcements and others, but before we provide all the details, please check the most recent price action:
Two month stock chart for Pulse Beverage Corp OTCMKTS:PLSB
2-month chart for PLSB
With the stock trading right now at the $.0006 candle, the stock gains this week have been phenomenal; 100%. From here, the upside is large; the stock could try to hit $.001 mark if PLSB keeps pumping out the beneficial news. On the downside, a close below the $.0003 mark would be worrying but does not seem likely, since, as we will show later, shorts are no longer present on this name.
Business
Pulse Beverage Corp develops, produces, markets and sells its Natural Cabana brand lemonade. The company has relationships with over 150 beverage distributors in all 50 states, Canada, Mexico, and other countries. In addition to Natural Cabana, the company sells coconut water and is developing a brand of heart-healthy beverages.
We encourage readers to check our previous review of the company, wherein an extended assessment of the products being sold is provided. It will help starters understand the growth potential shown by PLSB.
How has the company increased its distribution network?
PLSB is acquiring as well as signing distribution contracts with other distributors. Through this strategy, Pulse Beverage Corp is able to acquire already established distribution businesses to increase the number of potential customers very quickly.
In July, it signed a contract with KeHE Distributors to provide national distribution coverage for its Natural Cabana® Coconut Water, Lemonades, and Limeades. KeHE has 17 distribution facilities in North America and utilizes over 470 trucks to provide services to half of the top 100 retailers from coast to coast.
On August 2, 2017, the company signed a contract with Fiesta Mart, which is a regional grocery chain based in the Houston, Texas area, and has over 60 separate storefronts.
On August 28, 2017, a new agreement was signed with Doyles Sheehan, which will provide over 250,000 square feet of storage from middle Washington to western North Dakota, which includes northern Oregon, Washington, Idaho, Montana, northern Wyoming, and North Dakota.
On September 14, 2017, PLSB commenced shipping products to SunRidge Farms™ operating in Santa Cruz County, California.
On September 19, 2017, PLSB also noted that www.BuyPulseDirect.com, owned by DFW Supply Company of Fort Worth, Texas, had also commenced selling its products.
On November 28, 2017, the market got to know that Bashas’ and Food City grocery stores of Arizona were selling Natural Cabana® Coconut Waters in both Natural and Pineapple flavors.
Taking into account these efforts, we will be expecting revenue increases in the future. Keep in mind that the larger the number of sellers, the larger the sales figures. That’s not all. Additionally, we will be looking to read about the new initiatives of PLSB in 2018, since the company already announced that it will not stop. Read the following words:
“Our widening distribution coverage in the USA, together with our new initiatives overseas, should bode well for us in 2018. We look forward to announcing our progress in both areas in the near future.” Source
The market is growing at a high pace
This is another very good reason to believe that the company will be able to grow in the future. According to Nutritional Products International, the Natural and Organic Foods segment is one of the fastest growing market segments for food products in the USA. We need to note that total sales were equal to $47 billion in 2016; 10% higher than those in 2015. On the top of it, the organic drinks is the fastest growing component showing growth of 35% year over year.
The Q3 2017 Quarterly Report showed that the company keeps restructuring
On November 14, 2017, PLSB released its Q3 2017 Quarterly Report. While the company reported gross sales of $467,966, 34.0% less than those in the same quarter in 2016, the management believes that restructuring efforts will finally pay off in the future. The bottom line is already showing an upward trend, as the net operating loss was $922,137 compared to a loss of $683,262 for the comparable period in 2016.
In line with our vision, the company is also optimistic about the future performance. Read the following words:
“Our team is working hard to expand our customer base and build distribution channels. We made significant inroads in the third quarter 2017 and expect to continue winning accounts at an accelerated pace over the next twelve months. At the same time, we are continuing to make progress on reducing our overhead expenses and think that we will soon be able to show profitability.” said Robert Yates, CEO of Pulse.
In addition, while the company already reduced a large amount of debt, it promised to continue cutting long-term debt:
“As of September 30, 2017, we have reduced our debt to TCA by a further $188,702 from the principal balance reported as at June 30, 2017.” Source
Please remember that reduction of debt decreases the financial risk of shareholders, so the intrinsic value of the stock is enhanced. On the top of it, interest expenses are reduced, so expected earnings per share are higher. Shareholders always checking the PE ratio should appreciate these measures.
What are short sellers fearing?
The shareholders should appreciate that short sellers are exiting their position on the stock. The short interest decreased in a few months from 123,727 to 0 shares. Have a look:
Short Sellers - Pulse Beverage Corp OTCMKTS:PLSB
Short Sellers – Pulse Beverage Corp OTCMKTS:PLSB
This is good for the stock for two reasons. Firstly, the downward pressure on the stock disappears. Furthermore, knowing that these market participants believe that they will not make money by shorting the stock is beneficial for the longs.
Conclusion
Currently trading with a market cap of $0.4 million, PLSB is an exciting story among small caps. With the recent increase in the number of authorized shares, we will be expecting new transactions in the future. At least, this is what the company said in the filing. Read the following words:
“We believe that for us to successfully execute our business strategy, we may need to make one or more acquisitions, and in such event it may be preferable or necessary to issue additional shares as a part of such acquisition transactions.” Source
To sum up, this a name to follow closely in 2018.
Be sure to check out our coverage on PLSB.
Disclosure: We have no position in PLSB and have not been compensated for this article.
ACQUISITION, LEMONADE, MERGER, OTCMKTS:PLSB, PENNY STOCK, PLSB, PULSE BEVERAGE CORP, PULSE BEVERAGE CORP (OTCMKTS:PLSB)
AI
