Replies to post #10119 on General Stock Ideas

[gfp927z]

SC, I don't remember what the post was about, I think it had a link to a Webster Tarpley video over on You Tube. Sheesh, it's not like there's very much traffic on this board, mainly just us three posters. Maybe the I-Hub bots have an algorithm that searches for links/key words or something.

Btw, looking at the REED chart, after breaking key support, it looks like it's holding at the next support (2013 low), at least for now. I listened to the recent Q-1 conference call and they had a fairly serious disruption in one of their production facilities last Fall which meant some stores ran out of Reeds products and some of that shelf space was then given to a competitor's product. Reeds is in the process of regaining those shelf spots, which are called 'SKUs' in store parlance. I still like the stock though.

Over the past year Reeds has been expanding their production capacity 3 fold, and this expansion project should be completed by the end of the year. However, sometime this year they will have to shut down the LA plant for several 2 week periods in order to finish installing all the new equipment, so to that will likely make for some bumpy revenue numbers. They are also in the process of expanding into having Reed's natural sodas available via soda fountains (which are found in restaurants), which will be a first for natural sodas. Chris Reed said that this is $35 mil/year in added business, which will represent a 70% increase in total annual revenues for the company (from $50 mil to $85 mil).

So still some growing pains for Reeds, but longer term they look solid. Several years ago Chris Reed said he'll probably look to sell the company once revenues reach the $200 mil/year level. He said there have been several standing orders from larger companies to buy Reeds, but he first wants to build it up to its full potential. Wall Street wants to see profitability each quarter, but Reed would rather invest for growth, which comes at the expense of the quarterly net income that analysts would like to see.

Between that and the production interruption last Fall, REED stock is getting real cheap. I might look to get a modest long position later in the year, although being long anything in this peaking stock market is problematic. Soros increasing his short/puts and buying gold is ominous, and after 7 years we're due for a change in market direction. The chart has been trying to roll over for almost 2 years only to be juiced back, but that can't continue forever.