With drought and heat waves gripping much of the country, it might be a good
time to take a look at water dispenser stock Primo Water Corporation
, enhanced water stock Skinny Nutritional Corp.
and water purifier stock Puresafe Water Systems
. After all, water is an absolute necessity – especially in
the hot summer weather we are currently experience or after a natural disaster
or emergency. So will small cap water stocks Primo Water Corporation (PRMW), Skinny
Nutritional Corp. (SKNY) and Puresafe Water Systems (PSWS) refresh your
portfolio with profits? Here is a quick look at all three small cap water stocks:
Primo Water Corporation (NASDAQ: PRMW) Has Been
Accused of Misleading Investors
Primo Water Corporation produces the top-selling line of water dispensers in
the US which are sold at retail locations nationwide plus online while Primo
Water is bottled locally at over 60 locations nationwide using a 9-stage
purification process. Its also worth noting that Primo Water Corporation was
founded by entrepreneur Billy Prim who was the founder of Blue Rhino, a market
leader in propane grill cylinder exchange with over 29,000 retail locations in
49 states. On Tuesday, Primo Water Corporation rose 10.17% to $1.30 (PRMW has a
52 week trading range of $1.08 to $15.80 a share) for a market cap of $30.83
million plus the stock is down 57.2% since the start of the year, down 90.8%
over the past year and down 90% since late 2010. Investors should be aware that
back in December, a lawsuit was filed against Primo Water Corporation accusing
it of misleading investors about its financial condition and prospects. The suit
also demanded the rescinding of Primo Water Corporation’s stock offerings.
However and on Monday, it was reported that four defendants in the case have
been dropped. Otherwise, its worth noting that Primo Water Corporation’s 1Q2012
net sales rose 15.4% from $17.1 million to $19.8 million thanks to growth in
both water and dispenser sales but the company also reported a net loss of $3.9
million verses $2.1 million for the same period last year. Nevertheless, the
company is expecting to achieve profitability in the second half of 2012 but
investors might want to take a wait and see approach – especially given the
allegations in the lawsuit.
Skinny Nutritional Corp. (OTC: SKNY) Has Recently Raised
Skinny Nutritional Corp. is the maker of Skinny Water and a leader in the
zero-calorie enhanced water category. On Tuesday, Skinny Nutritional Corp.
announced that it and Trim Capital LLC have agreed to a financing transaction
that will involve the issuance of $9,000,000 of preferred and common stock and a
$6,000,000 senior secured credit facility plus at the initial closing, SKNY sold
a $1,000,000 senior secured bridge note. I am not sure what time the
announcement was made but on Tuesday, Skinny Nutritional Corp. rose 1.33% to
$0.0076 (SKNY has a 52 week trading range of $0.01 to $0.07 a share) for a
market cap of $5.43 million plus the stock is down 63.8% since the start of the
year, down 84% over the past year and down 96% over the past five years.
Investors should note that Skinny Nutritional Corp. has reported revenues of
$5,661k (2011), $6,927k (2010) and $4,146k (2009) for the past three years but
bigger net losses of $7,666k (2011), $6,914k (2010) and $7,306k (2009).
Obviously that can’t go on forever – even with the new financing.
Puresafe Water Systems (OTC: PSWS) Recently Announced its First
Puresafe Water Systems has developed the PureSafe First Response Water
System, a mobile and freestanding system that will purify water on-site to
provide clean drinking water faster and cheaper than traditional bottled water
solutions. In other words, Puresafe Water Systems has a system that every
disaster response team should probably have. However, investors should note that
Puresafe Water Systems has reported revenues of $287k (2011), zero (2010) and
zero (2009) along with net losses of $3,435k (2011), $6,640k (2010) and $2,102k
(2009). As of the end of March, Puresafe Water Systems had $46k in cash to cover
$4,420k in current liabilities. Nevertheless and in April, Puresafe Water
Systems did announce its first international sale via a distributor in Mexico –
meaning the stock could be worth watching should it start to produce more
revenues. On Wednesday, Puresafe Water Systems rose 1.16% to $0.0350 (PSWS has a
52 week trading range of $0.02 to $0.10 a share) for a market cap of $12.17
million plus the stock is down 40.1% since the start of the year, down 49.3%
over the past year and down 52.6% over the past five years.
The Bottom Line. While small cap water stocks Primo Water Corporation
(PRMW), Skinny Nutritional Corp. (SKNY) and Puresafe Water Systems (PSWS) all
could be worth watching, its hard to get excited about them right now - even if you are sweltering in record temperatures.