Forum Archive Index - September 2000

["Steve Moxham" <stevemox@e3.net.nz>]

I like this company, particularly their "V" division.

But one concern that I have is that they may have bitten off more than they can chew. They have expanded quite rapidly into overseas markets but do they have the capital behind them to create the type of mkt penetration that exists in New Zealand? It's going to be much harder to break into a market like the U.K. without sufficient capital and management expertise for marketing and distribution. That said I think their product is superior in the energy drinks market. The marketing is what makes this product, from the advertising down to the packaging. I like the target market, the name, and the very marketable trend of using natural substances - which does have a noticeable effect on the body - so it works! All in all I think it's a marketers dream which could, given the right amount of capital and management nous, be taken worldwide.     

If as a result of trying to grow too fast they run into an "earnings glitch" it would present the perfect opportunity to buy.

 

Price/Sales ratio currently 1.57 with a PE of 29.5.

Profit to Jun 2000: $9,593,000

Projected profit to Jun 2001: $20,400,000

Mkt cap: $284m