Growth stocks have been taking heat over recent days as interest rates pick up amid a sudden scramble following some less than positive inflation readings. However, the larger bull market trend remains intact, suggesting this pullback could be an important opportunity to put new money to work.
One spot that may be interesting is in the booming fitness drink space, which was valued at over $22 billion in 2018 but is projected to grow at nearly 8% through 2025 to nearly $40 billion, according to Grand View Research.
Researchers estimate that about 60% of men and 40% of women in the U.S. are usual consumers of sports drinks.
That has implications for a number of interesting stocks, including Celsius Holdings Inc (NASDAQ:CELH), National Beverage Corp (NASDAQ:FIZZ), Newage Inc (NASDAQ:NBEV), Splash Beverage Group Inc (OTCMKTS:SBEV), and Alkaline Water Company Inc (NASDAQ:WTER).
However, of the stocks on that list, the most interesting play in the group appears right now to be the underdog from the OTC: Splash Beverage.
That conclusion comes on the back of true blow-out results posted by SBEV yesterday afternoon for the three months ended March 31, 2021.
Spotlight on SBEV Results: On a Rampage
Splash Beverage didn’t just beat expectations and post a strong quarter to kick off 2021 – the company tore the cover off the ball:
- Cash jumped over 220% on a sequential quarterly basis to over $1.2 million.
- Total current assets jumped over 55% on a sequential quarterly basis to nearly $3.5 million.
- Net Revenues powered up over 2,000% on a year-over-year basis to over $2.4 million.
- Gross Profits boomed nearly 14,000% higher on a year-over-year basis to nearly $700k.
That represents performance data for the three months ended March 31, 2021, which represents a quarter following a very strong 2020, relative to prior performance standards. So, the stunning data above should hardly to be taken lightly as an artifact of comparisons with weak past benchmarks. 2020 total sales came in at nearly $3 million, up almost 15,000% year-over-year.
In other words, 2020 was the breakout year, but Splash’s performance in 2021 is already dwarfing even those benchmarks.
We look forward to management commentary on these results. But the quick take from the company’s 10-Q filing suggests a big and growing story that is only beginning to gain traction and show its true potential.
Next Steps
Based on the company’s recent communications, the Splash growth curve looks set to continue and possibly even accelerate. The steps that appear to be outlined ahead or already underway include non-toxic capital raising, an uplist off the OTC, and a sharp expansion in sales and marketing reach.
Splash recently filed an S-1 pointing to its pursuit to jump up to the NYSE American exchange in an IPO seeking $69 million. This comes just a few months after the company vaulted up onto the OTCQB exchange, meeting higher standards for transparency and due diligence.
The company specializes in manufacturing, distribution, sales & marketing of various beverages across multiple channels, including TapouT sports drinks, an international lifestyle brand that has been at the forefront of Mixed Martial Arts since 1997. MMA is the fastest growing sport in the US over the past 10 years, and there’s no reason to believe that won’t be the case over the next ten years.
The TapouT brand is big in MMA circles and stands to benefit from a return to full action and major MMA events over coming months as the pandemic gives way to the reopening trend.
Splash also recently announced that it has secured a partnership with Better Brands, a South Carolina distributor of more than 50 years that works with brands like Corona, Sam Adams, Danica Rose, Chateau Diana and more.
According to its release, Better Brands will distribute the Company’s SALT Naturally Flavored Tequila throughout the Myrtle Beach region, a world-renowned golfers’ paradise that attracts over 19 million visitors annually. Better Brands currently has 19 sales reps, six managers and two KAMS (key account managers), with more being added to expand the sales force for SBEV brands in line with increased opportunity and demand.
“As COVID-19 restrictions continue to lift, we are growing our seasoned team of sales professionals to maximize potential across our portfolio of brands. Splash Beverage Group is primed for expedited growth like never before,” states CEO Robert Nistico. “Currently, we are evaluating a number of high-profile target acquisitions and will continue to add more brands and expand our extensive network of distributors nationwide.”
