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American Water
Star (AMEX: AMW): The New Orders Keep on Flowing |
|
While the market continues to focus
nearly all of its negative energy on oil prices, companies continue to
deliver outstanding corporate developments which are not being met with
corresponding upside moves in stock prices.
Despite that fact that oil is not
flowing, new orders for the Hawaiian Tropic Beverage at American
Water Star are. It's heartbreaking to see companies deliver these great
fundamental developments without a corresponding move in stock price, but
such is the temporary market mania. Smart investors with a long term outlook
know this climate has OPPORTUNITY written all over it. To
paraphrase Rodney Dangerfield in Caddyshack: "They're all selling-
Then Buy".
I'm not a believer in long term oil
prices staying in this inflated range. The September futures have oil pegged
at $44 per barrel, but the futures one year out show oil in the low to
mid 30's. If the market believed in these prices forever, the long term
futures would be higher, and companies like Exxon (NYSE: XOM) and
Chevron
(NYSE: CVX) would be trading at 15 times next year's earnings, rather
than the traditional 6 to 8 times next year's earnings they currently garner.
Their costs are not climbing as rapidly as their revenues would be if $44
per barrel oil is here to stay.
I have been receiving lots of buy,
hold, sell type questions lately. In short, people want to know why companies
are doing great, but the stocks aren't. Should I buy, sell, or hold? I
have been preaching the same message for the last several months: Accumulate.
Identify the four or five companies you like, and continue to accumulate
your position, taking advantage of temporary pullbacks in the market. If
you are a short term trader, this is not a good market environment for
you. If you can't handle the concept that values could erode another 20%
on light volume over the next month, get out. If you have the risk tolerance
to add to your portfolio, do so. I have been hanging on to many positions
because I believe the majority of the damage has been done, and I know
I'm not smart enough to call the absolute bottom.
I don't know when the market is going
to behave better. August is usually the slowest month of the year, followed
by September, which is generally the worst month of the year. This leads
us to October, November, and December, which are generally the best months
of the year. This year I believe there is a pretty good chance September
could confuse history and be a strong month, mostly because the market
has traded so poorly since April.
This brings us to the main topic
of today's edition, which is AMW's announcement they have received
beverage purchase orders from another major grocery store chain. Giant
Food is adding AMW's Hawaiian Tropic to approximately 200 of
their stores in Virginia, Maryland, Delaware, New Jersey, and DC. According
to the press release, beverage will begin showing up on the shelves this
month.
The numerous orders the company has
announced in recent weeks leads one to the conclusion business is robust.
In the case of AMW, I believe we will be able to quantify the story
much better once we see the September quarterly financial results.
The very beginning of the Wal-Mart
orders surge will be disclosed in the June quarterly numbers which will
come out in about 10 days. From there, we will see the September numbers
in mid November. The growth rate quarter over quarter will give us a good
idea how fast the company is growing and where they could end up.
In a better market environment, I
can see the stock easily rebounding to the mid range of its recent drop,
which would put us around $1.40. It could happen tomorrow, in a
month, or never. Time will tell.
If the company continues announcing
orders from large new customers and a steady stream of orders from existing
customers, a move back up is highly likely.
Here is the complete text of today's
press release for your review:
| For Release: August
5, 2004 4:05pm EST
Giant Food, LLC. Brings
Hawaiian Tropic Beverages to the Mid-Atlantic States for American Water
Star, Inc.
Las Vegas (BUSINESS
WIRE) August 5, 2004 American Water Star, Inc. (AMEX: AMW News),
a publicly traded company, located in Las Vegas, Nevada, is pleased to
announce that product orders have been received from Giant Food, LLC.,
a supermarket chain in the Mid-Atlantic States.
Giant Food, LLC. supermarkets
will be adding the Hawaiian Tropic beverage line to approximately 200 of
their supermarkets in the following locations: Virginia, Maryland, Delaware,
New Jersey and the District of Columbia. Giant stores in New Jersey
and Delaware operate under the Super G name. The Hawaiian Tropic
beverage will be available to consumers on the Giant Food and Super G product
shelves during the month of August.
We are thrilled about
the addition of the Giant Food, LLC. supermarket chain. These stores expand
our retail network on the East Coast, stated Roger Mohlman, CEO of American
Water Star, Inc. The consumer demand for our beverages on a nationwide
basis is very exciting. We continue to penetrate additional geographic
areas to bring our beverages to the consumers.
About: American Water
Star, Inc.:
American Water Star Inc.
("AMW") is a publicly traded company, (AMEX: AMW), 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.
AMW's 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 AMW, 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 AMW's 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.
Contact:
American Water Star
Inc. Redwood Consultants, LLC.
Donald Hejmanowski,
702-740-7036 Jens Dalsgaard, 415-884-0348 |
Charts Provided Courtesy
Of TradePortal.com |
