Shares of Celsius Holdings (CSUH.ob) remained trading for under fifty cents after the company released two pieces of news last week; one being another distribution agreement in the Northeast - an area in which the product is quickly becoming cemented.
According to a press release issued last Thursday, two flavors of Celsius (Sparkling Orange and Green Tea/Raspberry Acai) will hit the shelves of over 200 ShopRite locations throughout six Northeastern states during the month of October.
An additional note in the release stated that the new distribution will be supported by radio and print ads in the market, although the advertising comes as no surprise to investors who are well aware that a nationwide media push has been in full effect for over a month now.
I expect additional distribution to be announced during the fourth quarter of this year, leading into the first quarter of next year, based on comments made by Celsius CEO Steve Haley during an
Investment Nation interview a few weeks ago. As distribution increases, the stock price continues to trade above its current earnings rate, but at some point the potential future earnings and growth of the company could spark another run in the stock price.
The ShopeRite distribution is nice, but previous statements by the company have me believing that something bigger is in the works.
Also of note last week, it was announced that the Celsius Green Tea/Raspberry Acai flavor was awarded the CSP Retailer Choice for the Best New Product of 2009.
As the worlds' first calorie burning beverage, Celsius is making a strong push to remain the recognized leader of the functional beverage category, and the recent advertising blitz combined with the distribution growth should only have a positive effect on the bottom line.
Quarter Three results are due out soon and while I do not predict breath-taking growth, I do predict very, very solid growth.
Unless CSUH dips to the mid-thirties again I'm set in my position of the stock, but I still think we're at a good 'accumulate the dips' level, based on the future growth potential of the company.
Disclosure: VFC is long CSUH.
