Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
Last month over 50 semi trucks filled
with American Water Star's line of Hawaiin Tropic zero carb/zero
calorie flavored beverages were delivered to the central distritbution
depot for Wal-Mart (NYSE: WMT) Superstores.
Wal-Mart Superstores will
begin selling the Hawaiin Tropic Line this Saturday, May 1st. Approximately
3,000 people have been retained to provide free samples of Hawaiin Tropic
throughout the month of May in all the Wal-Mart Superstores in the
United States.
Last year I inadvertently claimed
GE was the largest company in the world. I was wrong. As measured by sales
volume, Wal-Mart is now the largest company in the world, and their
clout can make any small company very successful.
If I've got your attention read on:
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Trading Alert:
American Water Star (OTC BB: AMWS) |
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In the nutritional world there is
a mega trend taking place. Obesity has become an epidemic in the US, plaguing
40 million Americans. Type II diabetes is a raging epidemic. It is self
inflicted; induced by diet. There has been a 76% increase in Type II diabetes
since 1990.
Nutritionist generally blame the
obesity epidemic on two main factors. First: Fast Food and/or junk food.
The processed foods we eat today are loaded with sugar and fat, leading
to obesity. Secondly, our sedentary life style. Thanks to technology, our
daily activities are much less physical than they used to be.
Within the food and beverage industry
there is a mega trend taking place. Americans are starting to recognize
we all need to make dietary changes to achieve health. The low carb revolution
is here, and the standard bearer names are Atkins, and South Beach. Books
like Dr. Phil's Ultimate Weight Solution are flying off the shelves, along
with the South Beach Diet.
More main stream advertisers are
pumping the "low carb" theme because it works. There are a few companies
with leading edge ideas who will experience dramatic growth over the next
few years as a result of the low carb revolution. Here's the OTC Journal's
idea in this arena, a company I believe will grow very rapidly this year:
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American
Water Star's (OTC BB: AMWS) Revolutionary New Products |
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History is replete with small and
creative food and beverage companies which came out of nowhere with a new
idea. Ground floor investors made fortunes.
Here's a few examples:
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In 1994, Quaker Oats bought Snapple
for $1.7 billion.
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More recently, PepsiCo purchase South
Beach Beverage Co (SOBE) for $370 million.
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From 1990 to 1991, upstart flavored
carbonated beverage company Clearly Canadian ran from about $2
to
a split adjusted high of $120 over one year.
American Water Star has emerged
on the scene out of nowhere to capitalize on the low carb revolution. The
company has developed new zero sugar, zero carb, zero calorie non carbonated
flavored beverages.
Rather than start a brand from scratch,
the company decided to license a recognizable household name. You are looking
at their flagship product, the Hawaiian Tropic beverage line. The
four flavors include Pineapple Pink Grapefruit, Passion Orange Guava, Kiwi
Strawberry, and Kiwi Lemon Lime.
The beverages are sweetened by Splenda,
the revolutionary new sugar replacement which is not considered an "artificial
sweetener", and has zero carbs. I can tell you from personal
experience, these beverages taste great.
Additional lines include Geyser
Sport, the kid's beverage line. This one is starting to hit grocery
shelves now, and is gaining momentum driven by new legislation. California
recently passed a law entitled the Childhood Obesity Prevention Act of
2003, which bans high sugar/ high caffeine beverages from the schools.
Some brilliant legislators finally figured out that our kids will learn
better if they don't spend their school day artificially jacked up from
stimulants.
40 school districts in Minnesota
have started serving Geyser Sport, and California schools are starting
to pick it up on an individual basis. American Water will be introducing
Geyser
Sport in the collapsible packaging all parents love. Geyser Sport
comes in six flavors: strawberry kiwi, cherry, wild berry, watermelon kiwi,
citrus punch, and fruit punch.
The company is also expanding into
the drink mixer beverage line. As many of you probably know, blended tropical
drinks are loaded with sugar, the evil carb. It is nearly impossible to
find any reasonable substitutes for these products.
As you can see from the picture,
American
Water is introducing a line of sugar free, calorie free drink mixers.
Margaritas, Pina Coladas, Mai Tais, and others are included in the product
offerings.
This will be a lower volume, higher
margin product line for the company.The company is capitalizing on the
South Beach diet by naming the line to correspond.
The marketing campaign includes its
own little mascot, a character you might see in advertisements over the
coming months. Meet Fling, the guy who claims "it's
all about the Bling", and has been created to become the low carb
poster boy.
As the new zero carb, zero calorie
line of drink mixers starts appearing on store shelves around the country,
Fling
will be appearing on signs and posters at key locations. The company has
some very ambitious marketing plans for the Fling character, and
he will be rolled out this summer in conjunction with the seasonal demand
for tropical drink mixers.
You can visit www.americanwaterstar.com
to learn more about their beverage lines.
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Growth
and Expansion Plans |
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The Hawaiian Tropic line was
introduced last July, and spent the second half of 2003 gaining momentum
amongst stores and distributors. American Water Star achieved $3.8
million in revenues last year which is really a start up number. Revenues
doubled every quarter in the latter half of the year, and I am anticipating
significant revenue acceleration this year as the Hawaiian Tropic line
gains traction and new lines are introduced.
The company already owns three of
its own bottling plants, and more acquisitions are being contemplated.
Two are now operational, and the third is being retrofitted to come on
line.
Due to increasing demand, American
Water currently is using seven other bottling facilities on an outsourced
basis to meet the demand for its products.
Retailers carrying the product include
Albertsons (AR, NM, and TX), Ingles (200 markets in SE US), Foodland (29
stores in Hawaii), Longs Drug, 7-11, and many others.
Today, with the news after the close
concerning the addition of Wal-Mart Superstores, this stock is probably
going gain a whole new life and a whole new audience.
To add further to rapidly accelerating
growth, American Water recently added O&S Distributors
to its customer base. O&S is not a household name, but it is
the 2nd largest wholesale food distributor in the US, and one of the largest
privately held companies in the world. O&S boasts a distribution network
of 4,000 independent stores and supermarkets on its distribution list.
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Conclusion:
Current Value and Upside Potential |
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As you can see from the chart, which
goes back to last summer when American Water first introduced the
Hawaiian
Tropic line, investors have been keyed in to the company.
The company has 75 million shares
I&O, so based on today's closing price, the market is already assigning
a $135 million market value to American Water.
Since large beverage companies generally
trade at about 5x annual sales, you could argue the market is already pricing
in $27 million in sales this year. However, large beverage companies don't
double in size every quarter, and accelerate from there. PepsiCo will be
lucky to squeak out 8% sales growth this year, and most of that will come
from acquisitions.
Today, after the market closed, AMWS
made
the Wal-Mart announcement which you can read below. As a result,
a break through the old high of $2.38 is probably imminent,
and suggests much higher levels could be in store.
This company is one of the first
to market; in the right place at the right time with the right products.
The low carb revolution is just getting started, and the health care industry
is beginning to grapple with the Type II Diabetes and obesity epidemics.
With Wal-Mart coming on board,
there is no telling where this stock might trade in the short term. I believe
$3 could be in the cards. We'll have to see what happens tomorrow.
If you have a Wal-Mart Superstore in your area, try to get over
there this weekend and find Hawaiin Tropic. Send me your comments
to editor@otcjournal.com.
The time to act is now. If Wal-Mart
loves it, why shouldn't you. Anybody who owned Clearly Canadian
in early 1990 experienced the returns from a growing young beverage company
with a new idea. AMWS could be Clearly Canadian 14 years later.
Here is the complete text of the
press release for your review. There is a conference call today to discuss
this event, but I'm sure it will be too late by the time you read this.
There are instructions for hearing a replay:
| Press Release Source:
American Water Star Inc.
American Water Star
Inc. Expands Retail Network to Include Wal-Mart Supercenter Stores
Tuesday April 27, 4:02 pm
ET
LAS VEGAS--(BUSINESS
WIRE)--April 27, 2004--American Water Star Inc. (OTCBB: AMWS - News), a
publicly traded company located in Las Vegas, is proud to announce that
beginning in May our Hawaiian Tropic Beverage line will be available for
purchase in more than 1,200 Wal-Mart Supercenter Stores nationally.
"We have had many shareholders
as well as Hawaiian Tropic Beverage fans contact the company with inquiries
about the location of local retail outlets that carry the Hawaiian Tropic
Beverage line. Wal-Mart Supercenter Stores will give the beverage a national
presence and will expose the beverage to a major portion of the United
States through product demos in these stores," stated Roger Mohlman, CEO
of American Water Star Inc.
As previously announced,
the company would like to remind interested parties of our conference call
at 1:15 p.m. PST today.
Interested parties may
hear the conference call by telephone.
Instructions for hearing
the conference call:
To
hear the conference call as it takes place:
Call 800-434-1335 in the United States or Canada or;
Call 404-920-6620 in the Atlanta area or internationally
Pin Code: 387452
Exclusive: For Expedited Entry into the conference, please
register via this link (www.AccuConference.com/amws) for
your Direct Access 800 number.
To
hear a recording of the call (available immediately following
the
call by telephone for 30 days after the call takes place):
Call 800-977-8002 in the United States or Canada or;
Call 404-920-6650 in the Atlanta area or internationally
Pin Code: Press * then 387452
About American Water
Star Inc.
American Water Star Inc.
("AMWS") is a publicly traded company and is engaged in the beverage bottling
industry. Its product brands are both licensed and developed in-house,
and bottled in strategic locations throughout the United States. AMWS'
beverage products are sold by the truckload, principally to distributors,
who sell to retail stores, corner grocery stores, convenience stores, schools
and other outlets.
At AMWS, we believe our
great-tasting, new zero sugar, zero calorie flavored water beverages have
positioned us to capture a large share of the market for healthy flavored
waters. Our products include: Hawaiian Tropic -- our latest product featuring
a sugar-free, no carbonation, and caffeine-free, sodium-free tropical drink.
Hawaiian Tropic flavors include Strawberry Kiwi, Kiwi-Lemon Lime, Orange
Guava and Pineapple Pink Grapefruit. For the grade school age children
we are introducing Geyser Sport -- our new non-sugared, 0 calorie, 0 carbohydrates,
0 sodium, vitamin and mineral-enriched, fruit-flavored beverage brand.
Our other premium beverages include Geyser Fruit Beverages -- our line
of eight different fruit-flavored waters which have proven to be popular
with consumers and Geyser Fruta -- our Latin line of seven different fruit-flavored
beverages.
Statements herein express
management's beliefs and expectations regarding future performance and
are forward looking and involve risks and uncertainties, including, but
not limited to, the ability to negotiate outstanding prior debts of acquired
companies; properly identify acquisition partners; adequately perform due
diligence; manage and integrate acquired businesses; raise working capital
and secure other financing; respond to competition and rapidly changing
technology; deal with market and stock price fluctuations; and other risks.
These risks are and will be detailed, from time to time, in AMWS' Securities
and Exchange Commission filings, including Form 10-KSB for the year ended
Dec. 31, 2003, and subsequent Forms 10-QSB and 8-K. Actual results may
differ materially from management's expectations.
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Contact:
American Water Star Inc., Las Vegas
Donald Hejmanowski, 702-740-7036
or
Redwood Consultants, LLC.
Jens Dalsgaard, 415-884-0348
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Source: American Water
Star Inc. |
Charts Provided Courtesy
Of TradePortal.com |
