“The One Dollar Soda Stock to Buy Today” Penny Stock Winners

Some fella named Jamie Dlugosch is helming the latest new offering from InvestorPlace Media, home to a few of the more hyped names in the financial newsletter world (Navellier, Hsu, Zambell, Tobin Smith, et al) — and this time, it’s a penny stock newsletter.

There seems to be a lot of that going around these days — we’ve always had penny stock letters, of course, but when an economic recovery seems to be in the wind they come pouring out of the woodwork … the conventional wisdom (with some data to back it up) is that tiny stocks do best in the first stages of a growth rally. So if you think that’s where we are, perhaps you’re looking for a microcap gem to throw some money at?

Well, I don’t know whether it will worth this time around or not — but I can tell you the name of the company Duglosh was teasing over the weekend.

Here’s the pitch:

“On July 4, a new financial advisory goes public. It will have 20 new recommendations—all of them penny stocks.

“But one of these stocks is so good, so blistering hot, I am going to GIVE IT AWAY to you today, a full month before the premier issue hits the Internet.

“Let me give you the down and dirty right here.

“This WAS going to be the Next Red Bull, the Next Snapple, the Next Monster. But it missed the boat.

“Bid up to $30, it met the credit hurricane and was shredded to 26 CENTS.

“Can you believe it?

“Look, this soda stock was NEVER actually worth $30 but come on, 26 pennies?

“This is a feisty turnaround, back-from-the-dead story with a surprising twist.

“Now, normally, I’d have to wait, we’d ALL have to wait, until the Premier Issue of Penny Stock Winners to get in on this.

“But I don’t see why we should do that and risk losing out on our first 100%, 500%, maybe 1,000% winner.”

So … is it going to be a winner? That I don’t know, but I can tell you that this stock has to be …

Jones Soda (JSDA)

Remember them? I used to see them everywhere, at every ambitious deli that wanted to be cool, and even at Target and Starbucks. Now? not so much — they seem to have been replaced in the consumer consciousness, at least here in Washington, DC, by Izze.

But the stock was in the firmament of pop culture stars for a while there — it did get close to $30 back in 2007, and it went down in almost a straight line to the low of 26 cents that it hit about six months ago … and it is indeed priced at almost exactly one dollar today.

So what happened? Well, it seems that they lost a bunch of major retailers, or at least lost good positions and glass bottle distribution at those retailers (those glass bottles were part of what made them stand out, as well as the wacky flavors, real sugar, and artsy labels).

The CEO of Jones Soda may have been a bit too prescient when he was quoted in Fast Company a couple years ago:

“But the world doesn’t need any more of this stuff. Because nobody cares when this stuff goes off the market. If Jones Soda fell off the face of the earth today — or if I got hit by a bus and the company got closed down, nobody would lose any sleep over it.”

Of course, that might be a good attitude for company management to have if it imparts a drive for innovation and great product development, but it also might hit a little close to home these days. [That Fast Company article is here, FYI — the guy is at least outspoken and fun to read.]

I don’t think I’ve ever actually tried the Jones Soda products, but I do appreciate the sense of humor and the “differentness” of the brand — they even have an energy drink called Whoop Ass that they describe as being “like a scissor kick to the uvula.” So no one can say they’ve sold out … but you also can’t say that they’re selling well.

Jones Soda ran up crazily in price for lots of reasons — it was touted as the “next Hansen,” there were rumors of buyouts, people thought the “cane sugar” natural soda would be slurped up by conscious consumers, and they had at least exploratory deals with folks like Starbucks, Target and Wal Mart, and concentrate and distribution deals that looked promising.

It obviously got way, way out of hand during the run up to $30 a share, when it traded at stratospheric PE ratios — and there was a big short position, as is typical of super-high-valuation fad stocks, so there was a lot of chatter about the “bear attack” bringing down the shares unfairly, but obviously there were very good reasons for the shares to do gown. Looking back at it as a snapshot, the price it hit in those days seems ridiculous — after all, right now we’re looking at a company that sells an expensive niche product, with limited distribution, and that doesn’t make a profit. And the old “making it up with volume” joke? Well, they’re not buying growth right now — their sales have been going down, too (down 25% in the latest quarter).

Then again, maybe this is that value point where there’s little to lose, and they have enough brand identity that perhaps the stock could be a coiled spring if anything great happens for the company. Now, with the shares fully collapsed and a negative PE (they lost 10 cents a share in the first quarter — admittedly, less than they lost a year ago), is it worth a tumble? When the stock hit 26 cents it meant they were trading at just about the value of their cash on the books (there’s no debt to speak of), and even at a dollar a share they still trade at less than 1X sales — so it will cost you more to buy a bottle of the soda (if you can find it) than to pick up a share of the stock.

Oh, and the “surprising twist?” For that, I guess you’ll have to subscribe to Dlugosch’s letter — this has been a surprising story all along, both up and down the charts, but I have no idea what the Jones Soda “twist” that he’s touting might be. At this point, any press commentary about the company that doesn’t use the words “plummet,” “collapse,” “failure,” or “loss” might be a nice twist, indeed.

A buy now? That’s what Dlugosch is telling us … me, I’m less confident, but it is, of course, your money — what do you think?

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19 Comments on "“The One Dollar Soda Stock to Buy Today” Penny Stock Winners"

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bigTimeOperator
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bigTimeOperator
June 8, 2009 11:10 am

IMHO the best soda stock right now is IBGH. They make and distribute drank beverage and anti-energy drink. Check it out:

http://www.drankbeverage.com/

Dennis
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Dennis
June 8, 2009 11:12 am

The fastest growing energy drink of All time is efusjon…..0- over 4 million in just 4 months…..check it out at http://www.myefusjon.com I really think that the Natural energy drink business is the future…not the soda business. efusjon is goung to make some people alot of $$$$$..

Karen
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Karen
June 8, 2009 11:16 am

Jones Soda is still sold at Target. It is also sold at Kroger.

The twist I think that is being spoken about is the supplement GABA.

jeff
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0
June 8, 2009 11:19 am

If people knew what was in soft drinks, they wouldn’t drink them.

No harangues from me if you want to drink soft drinks, but I know what’s in them.

Thanks, but no.

rodknee
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rodknee
June 8, 2009 12:12 pm

this is a moronic recommendation. jones soda is expensive and still trades at twice BV after the fad has passed. pump and dump newsletter, thanks.

Gravity Switch
Admin
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June 8, 2009 12:30 pm
I forgot to note that as a teenager growing up in upstate NY I was an eager consumer of Jolt Cola when it was introduced and made its way South out of Rochester, making eager addicts of young geeks everywhere. This makes me perhaps a little bit jaded about the staying power of any drink fad. That was the first novelty “energy” drink I ever saw (this was 1985, I think), it was plain ‘ol Cola (actually used sugar too at the time, unlike Coke) with twice the caffeine. The brand endures to this date in even faddier form, though… Read more »
SageNot
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SageNot
June 8, 2009 1:16 pm
http://finance.yahoo.com/q/ta?s=JSDA&t=5y&l=on&z=m&q=l&p=m50,m200&a=m26-12-9,v&c= The editor must have some TA blood in his veins. The lagging 200day avg. has been pierced, but the volume stinks. (Can I say that Travis, heh-heh?) The real action was on the downside during the 2007 breakdown & nearly into 2008. Are they facing any delisting problems, if you know Travis? A more recent chart view holds up my thoughts that Jones Soda’s vol. only seems to boil over on declines, I’ve done every chart view from 3mos to 5yrs, same conclusion. http://finance.yahoo.com/q/ta?s=JSDA&t=5y&l=on&z=m&q=l&p=m50,m200&a=m26-12-9,v&c= So, be contrary, try a little accumulation on these low vol days, use trailing stops… Read more »
Katie Catt
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Katie Catt
June 8, 2009 1:22 pm

I think the down turn in the economy had a lot to do with Jones Soda had a lot to do with them disappearing from store shelves. I used to see them at he local Wal-Mart, they’ve been replaced by Sam’s cola. I love Jones Cream Soda and the fact they use real sugar and not high fructose corn syrup. My favorite soft drink now is Pepsi Natural, which also uses sugar and not corn syrup. I understand Coca Cola uses sugar in the coke formula in the Atlanta area.

Ari
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Ari
June 9, 2009 6:32 pm

I like their (Jones) 24C Vitamin Product. Tastes much better than Vitamin Water in my opinion. I tried their soda once and it wasn’t bad. I can see how they have taken a hit in the retail department, as I visit retailers about once a week and have noticed their products are not re-stocked, even when they are running low. If they can work on their distribution, the company might have some promise, especially at these levels.

richard
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richard
June 14, 2009 11:36 am

The main problem with any cola/energy drink is simply stated above….you eventually get sick of it, like you would eating strawberry shortcake every day.

Follow what magazines, newpapers, movies do… come out with new ones all the time for lasting success. We Americans are true suckers for fads and loads of money is made from it.

Michael Murphy, CFA
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June 14, 2009 11:24 pm
Jamie and I had newsletters at the same time at InvestorPlace. He started with Al Frank of the Prudent Speculator, then went off on his own with The Rational Investor. InvestorPlace closed it because they couldn’t figure out how to market it. He’s smart, hard-working, knows how to rip apart a balance sheet, and often finds interesting, unusual ideas. IF anyone can make a penny stock letter work, he can. But that’s a big IF – people are risk-averse right now, and if you recommend 20 penny stocks you can almost guarantee that half of them will blow up. Just… Read more »
ponce
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ponce
June 17, 2009 5:35 pm

Start-up functional beverage is always hype as the next Hansen. I thought so. I bought Celsius (CSUH) and lost money. In marketing , only the first to succeed counts. Most copycats don’t make it. Pepsi is an exception but to this day it plays a second fiddle to coke.

singh
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singh
June 19, 2009 6:32 pm

pennystockwinners had new alert WPTE i missed to buy

singh
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singh
June 24, 2009 9:52 pm

LBIX could go look at earnings today

who noze
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who noze
June 17, 2010 3:14 pm

back in 1939 pepsi floated their first public offering at a one buck self admin. w// ads in the local papers Enter text right here!

james moylan
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March 15, 2011 11:26 am

I have a web site where I research stocks under five dollars. I am a astute value investor. I would like to comment about jones soda . I think cott corp symbol{COT} is a far better company than jones soda they are in the same business I think cott corp can get to 15 dollars a share over the next three years. cot corp is. a non-alcoholic beverage company, engages in the production, packaging, and distribution of retailer brand and branded bottled and canned soft drinks in North America and internationally.

Gravity Switch
Admin
11
June 8, 2009 12:20 pm

Could be — that’s their “functional” drink, supposed to improve alpha waves or something like that. With new energy and special supplement drinks all fighting for space and attention, I wish them luck.

Gravity Switch
Admin
11
June 8, 2009 12:22 pm

I doubt it’s a traditional “pump and dump,” since this is a major newsletter publisher and that kind of shenanigans is usually from the shadier sorts — but they could easily be hoping to drive up the shares to get attention for their official “launch” next month, I suppose, or just to make themselves look smart.

Karen
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Karen
June 8, 2009 3:46 pm
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