I hope you’re all having a wonderful Father’s Day weekend. If you’re like me, and stock trading is a passion of yours, then you’ll never stop trying to learn, develop, and try to improve your skills as a trader.
Heck, last year I took so many bad beats trading options I (more or less) swore them off.
However, it wasn’t the options market that sucked… it was my perspective and the way that I was trading them that was wrong.
Motivated by the success of my Millionaire Roadmap students and a different mindset…
I started testing a new options strategy using real money. And so far, it’s been nothing short of dynamite…
(I can’t wait to share with you what I’m working on)
However, I’m still tweaking the strategy, so I’ll save the details for a later date.
That said, it’s time for my latest catalyst swing trade alert. But before I get into specifics let me tell you what these trades are all about.
My catalyst swing trade alerts get sent out to clients 5-10 times a month (they received this one yesterday).
They tend to be under the radar stocks that hardly if ever get mentioned in the mainstream… nonetheless… they have the potential of “quietly” rising 20-40% if the right catalyst hits.
That said, my latest catalyst swing trade alert is a small-cap company with the distinction of being the fastest-growing beverage company in the world. However, its upcoming catalyst on… read on to find out more.
My latest catalyst swing trade alert is a beverage company that’s moving into the CBD market… and this one could start to bounce soon.
Now, before we get into the catalysts and the play, let’s take a look at the company profile and how cannabidiol can be used (CBD).
New Age Beverages (NBEV) Company Profile
New Age Beverages is a beverage company. It is engaged in the development, marketing, sales and distribution of a portfolio of Ready-to-Drink (RTD).
The company’s target market is currently health-conscious consumers, individuals who are becoming more interested and better educated on what is included in their diets.
As a result they shift away from options perceived as less healthy such as carbonated soft drinks or other high caloric beverages, and more towards alternative beverages choices.
NBEV markets, sells, and distributes brands including XingTea, XingEnergy, Aspen Pure, and Bucha Live Kombucha brands, and will develop new healthy functional beverage products.
Not feeling great? Just have a cool CBD drink and life will be great again! The more you listen to friends and family, the more you expect from these beverages infused with Hemp extracts.
Everyone is so enthusiastic about them as they are apparently good for almost every sort of pain.
With legislation granting Hemp related products more and more market access, people doing the mouth to mouth marketing, business opportunities are high for companies taking the lead currently. This is the case for New Age Beverages company, a Colorado and Utah-based company.
What is CBD?
It’s Cannabidiol, a non-psychoactive molecule found in cannabis, which is extracted from marijuana plants.
This extract is infused in beverages such as wine, water, beers, and coffee. CBD application is not only limited to beverages. It’s also applied in creams, lotions, and oils. In April, NBEV announced their intention to become the world’s leading healthy beverages and lifestyle company.
They announced the global launch of their CBD product portfolio and unveiled the line and shipment of their CBD which will be sold worldwide under its Health Sciences Division.
The first market to be targeted in the US is the state of California. With a population of almost 40 million people, California is the world’s eighth largest economy, and the largest market in the US for cannabis products.
Unfortunately, there is currently a law preventing major corporate retail chains to sell CBD beverages, foods and cosmetics but a solution is underway. A new bill will be soon accepted that will remove this burden and opens up the major roll-out of CBD beverages from NBEV.
Once this bill becomes law, you can imagine the huge impact on NBEV. Therefore, from all the different catalyst listed, the progress on the bill will probably have the biggest impact on the price of NBEV.
1) Approval for authorization of CBD products
Currently, the California state’s Sherman Food, Drug, and Cosmetic Law prohibits the manufacture, sale, and delivery of adulterated foods, beverages, or cosmetics.
A new bill is initiated that would explicitly state that a food, beverage, or cosmetic is “not adulterated by the inclusion of industrial hemp or cannabinoids,” thereby prohibiting restrictions on the sale of these products that include industrial hemp or its derivatives.
This bill will affect the state’s cannabis industry for sure and If implemented, entities that are licensed to engage in commercial cannabis sales would be allowed to manufacture, distribute, and sell products that contain industrial hemp.
The bill was already approved by the California State Assembly’s health and appropriations committees last month. Now state Senators take up the bill and we expect progress to be announced shortly. You can follow all information related to the progress of the bill here.
Any news on the progress and the potential acceptance by the Senate will most likely trigger a positive effect on the share price of all cannabis-related companies.
2) Participation in Oppenheimer Conference
Oppenheimer, a leading investment bank will host its 19th Annual Consumer Growth and E-Commerce Conference on 18 & 19 June in Boston.
Besides the prominent consumer brands (Home Depot, Lowe’s, Six Flags Theme Parks, Tiffany & Company, Weight Watchers, …), they will host some market-leading companies involved with emerging trends in the cannabis space this year.
NBEV is one of the companies they selected to particiate: Brent David Willis, Chief Executive Officer and Greg Gould, Chief Financial Officer of New Age will give a presentation, discuss major strategic initiatives and hold one on one meetings with institutional investors. Heck, even Bloomberg picked up this news, we anticipate that investors will follow shortly.
3) Expanding distribution / Logistics infrastructure
NBEV has a nice range of products and is focusing now on expanding their market access rapidly, even internatioanlly. They target favorable acquisitions to accomplish this mission. Their first acquisition was announced on 3 December 2018.
The $85 million largely cash deal for Morinda is a game changer, exploding revenue and gross profit out of the gate.
The move also opens up relationships with retail outlets internationally given Morinda’s presence in 60 different countries, something that should help expand the reach of its existing portfolio.
At the beginning of the month, they announced a second one namely “Brands Within Reach”. This acquisition opportunity came out of the blue and involves exclusive brand licenses – like Nestea and Evian – as well as logistics infrastructure.
They took this opportunity with both hands and CEO Willis stated about Brands Within Reach the following: “Even though this comes with these globally recognized brand licenses, the bigger play is the whole infrastructure of people and warehousing and logistics and distribution footprint that we can drive our brands through. It’s a much stronger organization. It’s the foundation for putting more things through that marketing funnel. However, while the acquisition is more about the talent NBEV is acquiring than the products it’s getting, these new brands widen the number of better-for-you functional beverages it can offer its food service and retail customers. Over the long-term, that’s positive for NBEV stock.”.
In addition, it’s important to point out that Nestea has brand awareness of 89% in the US. That high level of brand awareness is going to open a lot of doors for the rest of New Age’s lineup of products at big chains such as Costco and Walmart where Nestea is already a popular drink. You can read more about this acquisition here.
We will be looking for more news on the integration of these companies and NBEV products that will be launched via these new distribution channels. One example already hit the market with the announcement of its Noni+Collagen product in China achieving record sales levels in just its first three days of launch.
Should any of the positive catalyst hit in the coming weeks, a short squeeze will happen given the very high short interest of 35% of the float.
Potentially the price could explode again to the upside as it did in September last year when it went from $1.5 to $10 (+500%) in just a few days.
Here’s a look at the chart I’m watching now.
The recent bounce from $4.2 indicates support. Therefore it’s now ideal to buy NBEV with a stop loss around this $4.2 level and a first price target of $7 when a catalyst hits. While waiting, we can take a CBD drink and apparently everything will be great!
Now, if you want to receive catalyst swing trade alerts in real time, as well as access to hours of video lessons from myself and Nathan Bear (who hit TWO +1,000% last week) and the MRM chatroom, and so much more… click here to get started.