|Written by GSCR Staff|
|Tuesday, 08 April 2014 06:31|
The markets woes continue with the biggest three day sell off since 2011.
Is this a correction or a general the coming of the bears? We believe a correction. In any case, it is probably time to go to an old uncorrelated staple, booze. We highlighted Craft Brew Alliance (NASDAQ – BREW - $14.64) about a year ago and the stock is up nearly 100%. We took a look for another happy hour special for today.
Castle Brands, Inc. (NYSE – ROX - $1.20) looks like a potential ‘shot’ of confidence in this teetotaler’s market. The Company develops, imports, markets, and distributes rum, whisky, vodka, tequila, wine, and other liqueurs at Average Joe prices under brands like Gosling’s, Stormy cocktails, Jefferson’s, Jefferson’s Reserve, Pallini, Clontarf, Brady’s, Knappogue, Boru, Tierras, Celtic, Castello, Travis Hasse, and Gazio.
ROX is one of the few bulls around as it relates to Daily Moving Average technical analysis, and actually indicates a very bullish signal out to the 50-day metric. Additions to the distribution network and new brands are a great reason to believe analysts’ estimates for a 30% increase in revenue growth from FY14, which ended on March 31 this year, to FY15 of $53 million is entirely possible and maybe surpassed.
Castle Brands has an aggressive growth strategy and could be a solid anti-market play in an industry that does well regardless of the economy. Look for a price target of $1.75 by the calendar Q3 this year.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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