Castle Brands Inc (NYSEMKT:ROX) investors in this stock have reason to be excited with the recent insider purchases by CEO Richard Lampen. He purchased roughly 60,000 shares on March 17, 18, and 21. The market purchase price was between $0.84 and $0.88. Over $50,000 worth of stock was purchased by the CEO. Remember insiders buy for only one reason and that is if it will perform well over the future. In addition, ROX would make an excellent acquisition target with its huge growth and international expansion.
The company has been expanding internationally as a % of volume. It has increased from 22% to 31% of total volumes in terms of cases. Its top selling products are rum, whiskey, liqueur, and vodka. ROX objective is to continue building Castle Brands into a profitable international spirits company, with a distinctive portfolio of premium and super premium spirits brands. To achieve this, it continue to seeks to focus on our more profitable brands and markets. ROX continues to focus our distribution efforts, sales expertise and targeted marketing activities on its more profitable brands and markets/ To continue to grow organically. It focuses on brands that have profitable growth potential and staying power, such as its rums and whiskies, sales of which have grown approximately 46% over the past two fiscal years. A key focus is in building consumer awareness. Leveraging its massive distribution network is another strategy and execution goal.
Castle Brands Inc (NYSEMKT:ROX) has been in a decline for the last 1 year plus after it reached a multi-year high of $2.05. The stock has declined from $2.05 to its current levels of $0.85. $0.78 level has been an area of strong support and where it had consolidated before and acted as a support in the prior advance to multi-year highs. If the company can post positive earnings (EPS) and show investors it is making headway besides growing revenues, the stock may be able to surpass its prior multi-year high levels. Please look at the stock chart to see a potential path for the share price if the company can execute. It could even reach as high as $7.50 which has not been seen since pre-financial crisis in 2007. If it were to revisit those levels, it would gain almost 1,000% from current levels.
In recent developments, the company should be releasing its financial earnings report for full year and Q4 soon. ROX recently reported its Q3 report for the 3 and 9 months ending December 31. Net sales surged 26.5% to $52.3 million for the first 9 months ending Dec 31 compared to the same period in the prior year. The increase was due to the overall growth of our Jefferson’s portfolio and our Gosling’s rum and Gosling’s Stormy Ginger Beer. Our international spirits case sales as a percentage of total spirits case sales increased to 22.5%. The company reported an 11.8% increase in gross profit to $6.7 million for Q3 compared to the same period in the prior year.
Castle Brands Inc. develops, markets, imports, and sells beverage alcohol products in the United States and internationally. Its product categories include rum, whiskey, liqueurs, vodka, tequila, wine, and other spirits, as well as ginger beer. The company offers its products under the Gosling’s rum, Gosling’s Stormy Ginger Beer, Gosling’s Dark n Stormy, Jefferson’s, Jefferson’s Reserve, Jefferson’s Ocean Aged at Sea, Jefferson’s The Manhattan, Jefferson’s Chef’s Collaboration, Jefferson’s Presidential Select, Jefferson’s Rye, Pallini, Clontarf, Knappogue Castle Whiskey, Brady’s, Boru, Tierras, Celtic Honey, Castello Mio, and Gozio brands through a network of wholesale distributors and state-operated agencies.
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ROX is currently trading at a $133 million market valuation. The company should be announcing its Full Year 2015 results any day now. ROX needs to show an improvement in revenues while maintaining or reduce its expenses which has weighed down on its profitability and operating income. The USD has been an issue since more sales are derived internationally. ROX can regain its luster and power to new heights if it can excite its investor base once again. This company could be acquired by a larger company any day.
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Disclosure: we hold no position in ROX either long or short at the publication of this article and we have not been compensated for this article.