On May 15th when The Pulse Beverage Corp. (OTC: PLSB) filed their 10-Q for Q1, 2012, you could hear a pin drop on the stock’s virtual trading floor. Without anyone even caring, PLSB stock price had no gain that day after a pathetic display of investor interest showed volume of just 26,100 shares. Investors all dream about getting into the next Monster Beverage Corp (Nasdaq: MNST) while it is still a penny stock. So, why is there no love for PLSB when they just began shipping over $375,000 worth of their Cabana™ 100% Natural Lemonade last quarter for a 24% gross profit? Is it because Monster Beverage reported a 53% gross profit last quarter?
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PLSB Stock Chart
Market Cap: 19.96M
Shares Outstanding: 35.01M
52 Week High
(Jul 5, 2011): 1.28
52 Week Low
(Dec 14, 2011): 0.32
Ytd Pct Change: 45.78%
Ytd Moving Avg: 0.5392
Ytd Avg Volume: 49,403
Just last week, Pulse Beverage secured distribution with Capital Distributing, LLC, a MillerCoors distributor, a large full service beverage distributor with over 25 years in the wholesale beverage distribution business, employing more than 100 people and providing the best-in-class service to its customers. Capital Distributing, LLC, best known for distributing well-known beer brands such as Miller, Coors, Molson, Heineken, Guinness and Fosters, will be distributing Pulse Beverage’s Cabana 100% Natural Lemonade along side Rockstar Energy Drink, Sweet Leaf Tea, and other notable beverage brands.
Note: Prior to September 23, 2011 Pulse Beverage was a development stage company as they had no operating revenues. Production of their Cabana™ 100% Natural Lemonade started on September 23, 2011 and their first sale was October 2, 2011.
Financial Highlights for Pulse Beverage began with their top line number. Pulse reported Q1 of 2012 revenues of $376,700 from 33,284 cases of Cabana 100% Natural Lemonade sold into its distribution system. The number f cases sold represents more than 3X the number sold in Q4 of 2011. The Company reportedly expects case sales to more than 3X during Q2 of 2012 and expect a significant increase in sales in fiscal 2012 through a combination of additional DSD distributors, DTR distributors, re-orders and product awareness and product available to consumers through a full summer season. The company also plans to book revenues from their Pulse® NutriPurpose™ beverages during Q2 of 2012.
So, lets do some math:
3X 33,284 = 99,852
If 33,284 equals $376,700, then 99,582 equals $1.13 million
If Gross Margin for Q1 was 24%, 24% of $1.13 million is $271,224
So, with total operating expenses for Q1 of $500,013, it’s safe to assume that in 12-18 months, assuming the same sales growth and not factoring in the revenues from Pulse® NutriPurpose™, PLSB could have positive EPS.
About PLSB Stock
The Pulse Beverage Corporation was formed in 2010 by senior beverage industry veterans for the purpose of exploiting niche markets in the beverage industry. The Company’s Pulse® brand of beverages contain functional ingredients that have been shown to promote health. Pulse® beverages are unique in that they were scientifically developed and contain effective ingredients that are widely considered to be critical to adult health using liposome nanotechnology that introduces the ingredients into the beverage in a format that allows the body to absorb the nutrients.
The Company owns all the formulations, rights and trademarks relating to the Pulse® brand of beverages and specifically owns the right to use the following Side Panel Statement: “Formulation developed under license from BAXTER HEALTHCARE CORPORATION”. This right is in perpetuity without royalties.
Pulse Beverage manufactures and distributes Cabana™ 100% Natural Lemonade and plans to launch the Pulse® NutriPurpose™ brand of beverages in June, 2012.
Bottom Line: Bevearge penny stocks are always blockbuster investments. Millions go in to the production and when they hit the box office, the stock market that is, they either make or dilute. With such a tight float on PLSB stock and the fact that they are relatively thrifty in comparison to other beverage makers’ operating expenses, this is a really good penny stock.
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