AMWS...bought at open and bought more at 1.96.
Got this from OTC last night.
Trading Alert: American Water Star (OTC BB: AMWS)
In the nutritional world there is a mega trend taking place. Obesity has become an epidemic in the US, plaguing 40 million Americans. Type II diabetes is a raging epidemic. It is self inflicted; induced by diet. There has been a 76% increase in Type II diabetes since 1990.
Nutritionist generally blame the obesity epidemic on two main factors. First: Fast Food and/or junk food. The processed foods we eat today are loaded with sugar and fat, leading to obesity. Secondly, our sedentary life style. Thanks to technology, our daily activities are much less physical than they used to be.
Within the food and beverage industry there is a mega trend taking place. Americans are starting to recognize we all need to make dietary changes to achieve health. The low carb revolution is here, and the standard bearer names are Atkins, and South Beach. Books like Dr. Phil's Ultimate Weight Solution are flying off the shelves, along with the South Beach Diet.
More main stream advertisers are pumping the "low carb" theme because it works. There are a few companies with leading edge ideas who will experience dramatic growth over the next few years as a result of the low carb revolution. Here's the OTC Journal's idea in this arena, a company I believe will grow very rapidly this year:
American Water Star's (OTC BB: AMWS) Revolutionary New Products
History is replete with small and creative food and beverage companies which came out of nowhere with a new idea. Ground floor investors made fortunes.
Here's a few examples:
In 1994, Quaker Oats bought Snapple for $1.7 billion.
More recently, PepsiCo purchase South Beach Beverage Co (SOBE) for $370 million.
From 1990 to 1991, upstart flavored carbonated beverage company Clearly Canadian ran from about $2 to a split adjusted high of $120 over one year.
American Water Star has emerged on the scene out of nowhere to capitalize on the low carb revolution. The company has developed new zero sugar, zero carb, zero calorie non carbonated flavored beverages.
Rather than start a brand from scratch, the company decided to license a recognizable household name. You are looking at their flagship product, the Hawaiian Tropic beverage line. The four flavors include Pineapple Pink Grapefruit, Passion Orange Guava, Kiwi Strawberry, and Kiwi Lemon Lime.
The beverages are sweetened by Splenda, the revolutionary new sugar replacement which is not considered an "artificial sweetener", and has zero carbs. I can tell you from personal experience, these beverages taste great.
Additional lines include Geyser Sport, the kid's beverage line. This one is starting to hit grocery shelves now, and is gaining momentum driven by new legislation. California recently passed a law entitled the Childhood Obesity Prevention Act of 2003, which bans high sugar/ high caffeine beverages from the schools. Some brilliant legislators finally figured out that our kids will learn better if they don't spend their school day artificially jacked up from stimulants.
40 school districts in Minnesota have started serving Geyser Sport, and California schools are starting to pick it up on an individual basis. American Water will be introducing Geyser Sport in the collapsible packaging all parents love. Geyser Sport comes in six flavors: strawberry kiwi, cherry, wild berry, watermelon kiwi, citrus punch, and fruit punch.
The company is also expanding into the drink mixer beverage line. As many of you probably know, blended tropical drinks are loaded with sugar, the evil carb. It is nearly impossible to find any reasonable substitutes for these products.
As you can see from the picture, American Water is introducing a line of sugar free, calorie free drink mixers. Margaritas, Pina Coladas, Mai Tais, and others are included in the product offerings.
This will be a lower volume, higher margin product line for the company.The company is capitalizing on the South Beach diet by naming the line to correspond.
The marketing campaign includes its own little mascot, a character you might see in advertisements over the coming months. Meet Fling, the guy who claims "it's all about the Bling", and has been created to become the low carb poster boy.
As the new zero carb, zero calorie line of drink mixers starts appearing on store shelves around the country, Fling will be appearing on signs and posters at key locations. The company has some very ambitious marketing plans for the Fling character, and he will be rolled out this summer in conjunction with the seasonal demand for tropical drink mixers.
You can visit www.americanwaterstar.com to learn more about their beverage lines.
Growth and Expansion Plans
The Hawaiian Tropic line was introduced last July, and spent the second half of 2003 gaining momentum amongst stores and distributors. American Water Star achieved $3.8 million in revenues last year which is really a start up number. Revenues doubled every quarter in the latter half of the year, and I am anticipating significant revenue acceleration this year as the Hawaiian Tropic line gains traction and new lines are introduced.
The company already owns three of its own bottling plants, and more acquisitions are being contemplated. Two are now operational, and the third is being retrofitted to come on line.
Due to increasing demand, American Water currently is using seven other bottling facilities on an outsourced basis to meet the demand for its products.
Retailers carrying the product include Albertsons (AR, NM, and TX), Ingles (200 markets in SE US), Foodland (29 stores in Hawaii), Longs Drug, 7-11, and many others.
Today, with the news after the close concerning the addition of Wal-Mart Superstores, this stock is probably going gain a whole new life and a whole new audience.
To add further to rapidly accelerating growth, American Water recently added O&S Distributors to its customer base. O&S is not a household name, but it is the 2nd largest wholesale food distributor in the US, and one of the largest privately held companies in the world. O&S boasts a distribution network of 4,000 independent stores and supermarkets on its distribution list.
Conclusion: Current Value and Upside Potential
As you can see from the chart, which goes back to last summer when American Water first introduced the Hawaiian Tropic line, investors have been keyed in to the company.
The company has 75 million shares I&O, so based on today's closing price, the market is already assigning a $135 million market value to American Water.
Since large beverage companies generally trade at about 5x annual sales, you could argue the market is already pricing in $27 million in sales this year. However, large beverage companies don't double in size every quarter, and accelerate from there. PepsiCo will be lucky to squeak out 8% sales growth this year, and most of that will come from acquisitions.
Today, after the market closed, AMWS made the Wal-Mart announcement which you can read below. As a result, a break through the old high of $2.38 is probably imminent, and suggests much higher levels could be in store.
This company is one of the first to market; in the right place at the right time with the right products. The low carb revolution is just getting started, and the health care industry is beginning to grapple with the Type II Diabetes and obesity epidemics.
With Wal-Mart coming on board, there is no telling where this stock might trade in the short term. I believe $3 could be in the cards. We'll have to see what happens tomorrow. If you have a Wal-Mart Superstore in your area, try to get over there this weekend and find Hawaiin Tropic. Send me your comments to editor@otcjournal.com.
The time to act is now. If Wal-Mart loves it, why shouldn't you. Anybody who owned Clearly Canadian in early 1990 experienced the returns from a growing young beverage company with a new idea. AMWS could be Clearly Canadian 14 years later.
Here is the complete text of the press release for your review. There is a conference call today to discuss this event, but I'm sure it will be too late by the time you read this. There are instructions for hearing a replay:
Press Release Source: American Water Star Inc.
American Water Star Inc. Expands Retail Network to Include Wal-Mart Supercenter Stores
Tuesday April 27, 4:02 pm ET
LAS VEGAS--(BUSINESS WIRE)--April 27, 2004--American Water Star Inc. (OTCBB: AMWS - News), a publicly traded company located in Las Vegas, is proud to announce that beginning in May our Hawaiian Tropic Beverage line will be available for purchase in more than 1,200 Wal-Mart Supercenter Stores nationally.
"We have had many shareholders as well as Hawaiian Tropic Beverage fans contact the company with inquiries about the location of local retail outlets that carry the Hawaiian Tropic Beverage line. Wal-Mart Supercenter Stores will give the beverage a national presence and will expose the beverage to a major portion of the United States through product demos in these stores," stated Roger Mohlman, CEO of American Water Star Inc.
As previously announced, the company would like to remind interested parties of our conference call at 1:15 p.m. PST today.
Interested parties may hear the conference call by telephone.
Instructions for hearing the conference call:
To hear the conference call as it takes place:
Call 800-434-1335 in the United States or Canada or;
Call 404-920-6620 in the Atlanta area or internationally
Pin Code: 387452
Exclusive: For Expedited Entry into the conference, please
register via this link (www.AccuConference.com/amws) for
your Direct Access 800 number.
To hear a recording of the call (available immediately following
the call by telephone for 30 days after the call takes place):
Call 800-977-8002 in the United States or Canada or;
Call 404-920-6650 in the Atlanta area or internationally
Pin Code: Press * then 387452
About American Water Star Inc.
American Water Star Inc. ("AMWS") is a publicly traded company and is engaged in the beverage bottling industry. Its product brands are both licensed and developed in-house, and bottled in strategic locations throughout the United States. AMWS' beverage products are sold by the truckload, principally to distributors, who sell to retail stores, corner grocery stores, convenience stores, schools and other outlets.
At AMWS, we believe our great-tasting, new zero sugar, zero calorie flavored water beverages have positioned us to capture a large share of the market for healthy flavored waters. Our products include: Hawaiian Tropic -- our latest product featuring a sugar-free, no carbonation, and caffeine-free, sodium-free tropical drink. Hawaiian Tropic flavors include Strawberry Kiwi, Kiwi-Lemon Lime, Orange Guava and Pineapple Pink Grapefruit. For the grade school age children we are introducing Geyser Sport -- our new non-sugared, 0 calorie, 0 carbohydrates, 0 sodium, vitamin and mineral-enriched, fruit-flavored beverage brand. Our other premium beverages include Geyser Fruit Beverages -- our line of eight different fruit-flavored waters which have proven to be popular with consumers and Geyser Fruta -- our Latin line of seven different fruit-flavored beverages.
Statements herein express management's beliefs and expectations regarding future performance and are forward looking and involve risks and uncertainties, including, but not limited to, the ability to negotiate outstanding prior debts of acquired companies; properly identify acquisition partners; adequately perform due diligence; manage and integrate acquired businesses; raise working capital and secure other financing; respond to competition and rapidly changing technology; deal with market and stock price fluctuations; and other risks. These risks are and will be detailed, from time to time, in AMWS' Securities and Exchange Commission filings, including Form 10-KSB for the year ended Dec. 31, 2003, and subsequent Forms 10-QSB and 8-K. Actual results may differ materially from management's expectations.
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Contact:
American Water Star Inc., Las Vegas
Donald Hejmanowski, 702-740-7036
or
Redwood Consultants, LLC.
Jens Dalsgaard, 415-884-0348
