This weekend The Green Baron Report is revisiting one of our favorite stocks of the past for good reasons.  Late last year in early December of 2003, we selected Tropical Beverage as a fully profiled stock for our home page because this value-added water-based beverage manufacturer and distributor appeared on the verge of a tremendous growth in sales and earnings based on new contracts.  About four months later in March of 2004, TPBV hit a high of .076 per share, a move of over 533% from our original profile price of just .012 per share.

The Green Baron Report is proud to add Tropical Beverage a second time to our storied list of fully profiled Green Baron stocks for our home page, and we are making Tropical Beverage our October Focus Stock of the Month.  Percentage returns that we show on our home page will be based on the latest closing price of .0385 per share.  We believe that the company’s current shift from low margin water products to increased production of much higher margin new beverage products will drive revenues and earnings tremendously over the months and years to come.

Let’s review some of the facts.  Tropical Beverage now has about 400 million total shares issued and outstanding.  The Green Baron Report has reviewed internal sales and earnings projections based on several production contracts that are expected to be fulfilled.  We concur that Tropical Beverage could easily achieve over $30 million in sales and earn about $7 to 8 million after taxes over the next year.  Since we are confident Tropical Beverage will close its contracts, we agree that earnings of about .015 to .02 per share are not out of line. This means even a 10 times earnings multiple would put TPBV at .15 to .20 per share.  If Tropical Beverage files next year to become a fully reporting company, we believe a higher multiple should be used.

Tropical Beverage is based in Santa Ana , California with 50,000 square feet of warehouse production and office space, and an additional 15,000 square feet of outside yard space for storage, equipment, and shipping.  Tropical has an extensive product line that includes pure spring water, flavored waters, vapor distilled waters, ultra-pure purified waters, micro clustered waters and waters with additives (including oxygen, caffeine, electrolytes and other enhanced minerals and vitamins).  They specialize in private labeled water and have products placed in stores around the world.  In addition, Tropical Beverage continues to seek acquisitions of related companies that will enhance their product development and to build a network of subsidiaries across the nation.  

The Green Baron Report believes that Tropical Beverage is entering a new phase in its development as a dependable manufacturer and distributor of premium water-based products.  The company’s decision and ability to concentrate on higher margin business should be clearly demonstrated over the coming months.  The Green Baron Report is convinced that CEO Mark Millsap and CFO Chris Lotito will lead this company to much larger success.  We anticipate more innovative and exciting new product delivery over the coming months to drive significant interest towards this stock.   If sales targets over the coming quarters are met, TPBV should have no problem hitting new highs.