Reeds Inc. (REED)

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TA-wise, there is a possible head and shoulders forming (see chart below), though still early. Also, Q-4 revenue comparisons will be somewhat more difficult since they did $7.9 mil in Q4-2011, and thus will need approx $9.5 mil in Q4-2012 to maintain the 20% growth rate. With Kombucha sales ramping up, it could happen, but will be a tougher YOY comparison for one quarter.

Longer term though, Reed's looks extremely good. Kombucha has monster potential, and with a market cap of only $80 mil, there's a ton of upside for the stock IMO. Reed's has great management with a vision, and with a 26% ownership stake (3.1 mil shares), Chris Reed is averse to dilution. He wants to use the growing cash bonanza from Kombucha to fund ad campaigns for all the other Reed's brands and make them household names. Kombucha has nearly double the profit margins of Reed's existing product lines, which already have very strong margins.