To OTC Journal Members:
 

American Water Star (AMEX: AMW): Conference Call Thursday

This Thursday, fifteen minutes after the market closes, Chairman Roger Mohlman of American Water Star will be hosting a conference call to bring investors up to date on developments at the company.

In terms of stock price performance AMW has been one of our worst ideas of 2004. The stock has traded between $1.80 and $.50. It currently resides near the low end of its trading range.

As stated in past editions, I believe at $1 the market is giving the company the benefit of the doubt that they are, or can in the reasonably near future, achieve $20 million as an annual revenue run rate. In the June quarter, which was the beginning of the sales to Wal-Mart, the company achieved $1.8 million. On the surface this may seem anemic, but as compared to the $440,000 the company delivered in March, $5 million per quarter is not a huge leap of faith. After all, the quarter to quarter increase equates to a 1236% annual growth rate. 

However, the stock has sold off consistently throughout the course of the summer. If you believe a stock's behavior is a proxy for the company's fortunes, you might assume the September quarter is going to be disappointing.

As compared to other similar beverage companies, the market would be giving AMW the benefit of the doubt for $10 million in sales at $.50. However, this does not take into account the value of their five bottling facilities. There are no other small beverage companies with the bottling capability of AMW. They have infrastructure in place which would allow them to generate $30 million per month in sales if the orders materialize. I'm not sure how you would value the bottling plants, but I know they have less value if they don't have orders to produce.

At the beginning of the year AMW had 400 retail accounts. Today they have 12,000 retail accounts. But are those accounts buying from the company? That is the big unknown, and the answer is clearly what the market is concerned about.

The time has come to listen to management and make up your own mind. If you are a shareholder it is critically important you tune in to Thursday's conference call and decide how you feel about the future of this company. After all, it's your money.

Here are the instructions. The live version will begin Thursday, October 28th, at 4:15 Eastern, 1:15 Pacific.  If you are not free to hear the live version, there will be a recorded version you can listen to at some point in the future.
 

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