Replies to post #1294 on Celsius Holdings Inc (CELH)

[mullimatt]

Good points to consider. Have you been following the board long? Or are you new to iHub? If you are a newcomer, welcome!

A little while ago I posted something that addresses exactly what you are talking about. I will repost the picture here:





Steve (CEO) presented this image at the Investor Conference in June.

It shows the sales multiples for 11 different beverage companies that have been bought out since 2002. Six of these 11 transactions occurred in the last 2 years. Hence, the data is recent and applicable to our current situation. Also, note that all the companies above are all in the 'functional beverages' industry.

My valuation model that I presented yesterday (post #1286) is based on these sales multiples.

I chose to do a high (10x), medium (7x), and low (4x) based on this slide.

Because the slide was presented to investors by CSUH CEO, I consider the information to be relevant indicator of the beverage industry and fair valuations.

Vitamin Water was the category creator and leader in functional beverages. It posted the highest valuation, at 10x sales.

The median, however, is around 4x. Hence why I chose to do multiple valuations (high, medium, and low).

The multiple scenarios allow individual investors to make up their own minds as to what sales multiple should be used. The commonality amongst all three valuations is that we are currently overvalued. I believe we are due for a correction.

[Toxic Avenger]

IMHO you can't look at a huge success story like HANS and say "This product is similar so the companies are comparable". Aside from the fact that it was a success, HANS was not an undercapitalized OTC stock when it took off.
In 2001 it had almost $100 million in sales and profits of $3 million. By end of 2003, sales were up to $135 million and profits were at $6 million. What did the stock do? Well from 1/1/01 through 6/30/03 it stayed within a range of a few cents of 50 cents/share. In the last half of 2003 it started to climb and ended the year at $1.
If you wanted to pay much less than 50 cents a share you had to buy pre mid 1998! So for a five year period, including the first profits and a large sales increase, you would have paid the same for the stock. Once it was successful and profitable for 3 years with sales going to $224 million in 2004 and $415 million in 2005, with profit of $20 million and $63 million, THEN you saw the price begin to move significantly. It clearly wasn't based on speculation or hype.

And today, with sales of about $1 billion a year and profits of over $100 million, what is HANS multiple of sales? About 2.6.

And that's the "out of the park" success story stock.