Updated Report 12-6-22 10AM EDT – Investing in Splash Beverage Group (SBEV) could be tantamount to investing in Monster Beverages (MNST) when it was $1/share.

Updated Report 12-6-22 10AM EDT – Investing in Splash Beverage Group (SBEV) could be tantamount to investing in Monster Beverages (MNST) when it was $1/share.
Splash Beverage (SBEV) CEO Says “We Are Firing on All 8 Cylinders with All Brands”

Distribution deals followed by the AB ONE deal:
Walmart – Target – Ralphs (Kroger) – Save-A-Lot – 7-Eleven – Winn-Dixie – Target – and many more. (more on this below)

Good day everyone,

Splash Beverage Group, Inc. (NYSE American: SBEV)

Current price $1.01/share (+1% as of market close 12-5-22)

After opening the Monday session at $1.00, SBEV shares traded as high as $1.09/share before ending the day with a modest 1% gain to $1.01. Investors were interested, driving the daily trade volume to 538K shares or 2.6X the average daily volume, but the volatility in the equities markets held a damper on the share price. I expect SBEV shares may gain traction through this week.

I want to point out some of the brands and companies the management team at SBEV have been involved with in executive positions in the past:

Red Bull – Diageo – Sweet Leaf Tea – AB InBev – Jones Soda – Sobe – FUZE Tea – Muscle Milk

The above are some of the biggest names in the beverage industry and it’s the credibility the SBEV team has from these prior experiences that will propel the company upward.

If you look at the history of SBEV you will see that the company has developed many regional distribution deals that have resulted in growing revenues and brand recognition. Then they landed a big one.

A year ago, SBEV signed a distribution agreement for TapouT, Copa di Vino and Pulpoloco with AB ONE. AB ONE is owned by AB-InBev (Budweiser), the largest beverage company in the world and the agreement represented SBEV’s single largest distribution deal to date. The stature the AB ONE deal attached to SBEV has been followed by distribution agreements with:

Walmart – Target – Ralphs (Kroger) – Save-A-Lot – 7-Eleven – Winn-Dixie – Target – and many more.

Some of those deals are still getting traction and building to their full potential. The distribution deal with AB One and a product presence at the retailers listed above are likely the driving factors analysts are considering with their projections of FYE revenues over $30M for SBEV.

SBEV has brought in James Michael Allred to the position of Senior Vice President of Sales to be responsible for leading the sales organization, driving sales initiatives through Splash’s growing distribution network, and building the size of their national retail-chain customer base. Allred was employed by Anheuser-Busch InBev where he held several senior-level sales roles since beginning his career there more than 20 years ago.

A major distribution agreement with AB One, followed by recruiting a sales executive with 20 years’ experience at AB InBev. Do I see a thread developing here?

As I said before, a beverage company cannot afford to run out of products with gold standard retailers like those above. That’s why I will cheer every time SBEV needs capital to build inventory.

Acquisitions in the beverage industry are commonplace and profitable. Look at the top beverage companies and you’ll discover they consist of a collection of brands most of us are familiar with and acquiring companies can pay 7-20X revenues to acquire a brand they want.

SBEV has always made it clear their brands could be acquired if the price is right and creates a benefit to shareholders (this is where the 31% insider ownership becomes significant).

SBEV still looks really oversold to me. Most of my fundamental and technical evaluations tell me that. As I said at the beginning of our coverage of SBEV, this may be the one where you get in cheap and brag about later.

Original coverage below

Investing in Splash Beverage Group (SBEV) could be tantamount to investing in Monster Beverages (MNST) when it was $1/share.

Splash Beverage Group (NYSE American: SBEV) Robert Nistico was the 5th employee and VP/General Manager for Red Bull N. America, he led the startup from zero sales to $1.45B

Sales at Splash Beverage (SBEV) Up Over 600% in Just Two Years and Their Distribution Network is Growing Rapidly

Hello everyone and welcome to all our new members,

Splash Beverage Group, Inc. (NYSE American: SBEV) owns a growing portfolio of alcoholic and non-alcoholic beverage brands that it sells through distributors and online.

Current price $1.00/share (as of market close 12-2-22)

SBEV revenues are on fire and the stock is oversold. This is just the kind of scenario I like.

Revenue growth at SBEV:

FYE 2019             $1.0M
FYE 2020             $2.9M
FYE 2021             $11.3M
FYE 2022             $19.0M (pro forma based on first 9 months sales of $14M)

Recent highs for SBEV shares:
September 22, 2022,      $2.19/share
July 21, 2022,                   $3.25/share

Circumstances at SBEV have created a unique opportunity for our group. In late September, the company did a stock offering to raise $3.1M of cash they plan to use to increase their inventory. Some investors may have seen that stock sale as a negative, since the SBEV share price fell and remains at a lower level. I looked at that cash raise and thought, eureka!!

An analyst from EF Hutton recently covered SBEV and seemed to express my exact thoughts saying, “The company understands that distribution is key to success in the beverage industry. It continues to focus on expanding its distribution network, adding nine new distribution/sales agreements with distributors and retailers in Q3 alone. As more retail and distribution channels are added, inventory stock has also become vital because the company must ensure it can adequately supply its distribution network. SBEV is currently evaluating traditional credit facilities to fund its growing inventory needs which we see as a positive sign.”

In that same report from 2 weeks ago, the EF Hutton analyst maintained his target of $5.00/share (upside of 500%).

I just read another analysts’ report that projects FYE 2023 revenues for SBEV at $30.7M. Maybe you can agree with me that a company exhibiting such explosive growth and that level of revenue projection could support a higher valuation. When I look at that 2023 revenue projection of $30.7M (which I think is doable), I see a modest P/S ratio of 4.0X (the industry standard is higher) resulting in a price of $3.07/share.

Building a beverage business is all about distribution and brand recognition. The worst thing that can happen is letting your distributors run out of your product because (1) they will fill that empty shelf space with another product and (2) you may not get back in the door.

Three weeks ago, SBEV named James Michael Allred to the position of Senior Vice President of Sales. Prior to joining SBEV, Allred was employed by Anheuser-Busch InBev with oversight of 7-Eleven (78,000 locations globally), and the team of 30 which serviced this customer. Allred has the contacts, skillset, and experience to build a strong distribution network for the company.

The SBEV All-Star Lineup of Beverages:


   TapouT– An international lifestyle brand performance drink with 6 Key Vitamins, ALL 5 Electrolytes and 3 Antioxidants. Available in 4 flavors. NFL legend Drew Brees is Ambassador at large for the TapouT brand.

   Salt Tequila -100% blue agave blanco style 80 proof tequila. Grown, distilled, and bottled in Jalisco Mexico. Available in 3 flavors.

   Copa Di Vino – Premium wine by the glass, available in 3 flavors. Famously launched with multiple appearances on the hit television series, Shark Tank, the brand is now widely recognized for premium wines without the need for bottles, corkscrews, or glass.

  Pulpoloco Sangria – A light-bodied, fruity, and refreshing sangria made of the best blend of true Spanish ingredients, packed in a unique eco-friendly CartoCan® Available in 3 flavors.

   Qplash – Is the company’s consumer-packaged goods retail division and entry point into the growing e-commerce channel. The division sells beverages and groceries online through third-party storefronts such as Amazon.com and Walmart.com.

The SBEV product line offers beverages with clean ingredients, intriguing flavors (salted chocolate tequila) and eco-friendly packaging that appeal to a younger demographic.

I would be remiss not to mention Robert Nistico, Chairman & CEO of Splash Beverage Group, a 28-year beverage industry veteran. Robert was the fifth employee and VP/General Manager for Red Bull North America, where he led the start-up from zero sales to $1.45 billion. Robert knows how success happens in the beverage industry and is guiding SBEV toward that end.

I was intrigued by a recent comment made by Mr. Nistico saying that “we are gaining national chain retail and distribution support at a level I haven’t experienced since RedBull after about 5 years in the market.”

We all know how large the beverage market is so there is no need to quote statistics. The SBEV model, to penetrate the market, is working as evidenced by their growth in revenues. The management team is comprised of beverage industry veterans that know exactly how to build a successful brand. I like everything about SBEV.

SBEV statistics:

FYE is December 31st.
MRQ is September 30, 2022
Outstanding shares        40.1M
Shares in float                  25.7M
Insider ownership           31.4%
Revenues (ttm)                $16.3M
Cash (mrq)                       $2.6M
Market cap                       $41.3M

SBEV shares show indications of being oversold. The shares have fallen below all their SMA level averages, and the RSI (14) is at a low 38.72.

Stay tuned for more on SBEV,

The Traders News Growth Stock Group





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