Castle Brands Inc (NYSEMKT: ROX), Willamette Valley Vineyards, Inc. (NASDAQ: WVVI) and Montalvo Spirits Inc (OTCBB: TQLA) have the distinction of being among the handful of small cap liquor or wine stocks left that have not been gobbled up by large cap alcohol players as the industry moves towards greater consolidation. That might be because these three liquor or wine stocks have gone the premium route rather than take on the big boys of the industry – meaning they or their brands could be acquisition targets at some point in the future. With that in mind, here is a quick look at all three to help you decide whether any might deserve a place in your portfolio or for that matter, your liquor cabinet or wine cellar:
- Castle Brands Inc. Focused on the high-end segments of leading internationally recognized product categories, Castle Brands’ mission is to develop and grow its current portfolio of premium brands and to complement these brands through a combination of acquisitions, agency relationships and new product development. These brands include Gosling’s Rum, Gosling’s Dark ‘n Stormy ready-to-drink cocktail, Jefferson’s, Jefferson’s Reserve and Jefferson's Presidential Select TM bourbons, Jefferson’s Rye whiskey, Clontarf Irish whiskey, Pallini liqueurs, Boru vodka, Knappogue Castle Whiskey, Tierras TM tequila, Celtic Honey liqueur, Brady's Irish Cream, Travis Hasse’s Original Pie liqueurs, Gozio amaretto, A. de Fussigny cognacs and the CC: TM line of wines. Castle Brands does not produce much in the way of press releases with the last earnings report for the third quarter being from February where the company reported a net sales increase of 21.8% to $10.6 million while adjusted EBITDA improved by 78.6% to a loss of ($0.1) million verses a loss of ($0.5) million. The company’s CEO also noted that cost containment continued to cause operating margins to improve and the cash consumed by operations, as measured by adjusted EBITDA, declined significantly. On Wednesday, Castle Brands fell 1.29% to $0.375 (ROX has a 52 week trading range of $0.25 to $0.42 a share) for a market cap of $40.72 million plus the stock is up 29.3% over the past year and up 56.2% over the past five years.
- Willamette Valley Vineyards, Inc. Based in Oregon, Willamette Valley Vineyards produces and sell premium, super premium and ultra premium varietal wines and operated in two business segments: Produced Wine (which are made from grapes grown on the 791 acres of vineyard owned, leased or contracted by the Company as well as from grapes purchased from other nearby vineyards) and Bacchus Distribution (which distributes purchased wine and glassware at wholesale prices to in-state customers). Like Castle Brands, Willamette Valley Vineyards does not have much news for investors. In the middle of May, Willamette Valley Vineyards reported an 11% revenue increase to $3,041,559 along with a net income rise from $186,365 to $296,593. Otherwise, there was not much commentary with the earnings release, other than: "We are very excited about expanding the hospitality services at our winery to further develop our relationships with retail customers and continue to cultivate our brand loyalty." On Wednesday, Willamette Valley Vineyards fell 8.38% to $4.35 (WVVI has a 52 week trading range of $3.33 to $4.97 a share) for a market cap of $20.95 million plus the stock is up 24.4% over the past year and down 18.2% over the past five years.
- Montalvo Spirits Inc. Created to develop, market and distribute a portfolio of premium alcoholic beverages, Montalvo Spirits’ focus is on the artisanal spirits category with its initial offering being the award-winning Montalvo Tequila. Investors should note that Montalvo Spirits recently secured placement of Montalvo Tequila in the Mexico Pavilion of Walt Disney World's Epcot theme park plus its also now available in California, Connecticut, Florida, New York, New Jersey and Oregon. The company is also in talks to further expand Montalvo Tequila’s distribution throughout the US and internationally with additional wholesaler partnerships expected to be announced early this summer. In addition, Montalvo Spirits has just announced a Letter of Intent with Broken Heart Spirits Limited, a New Zealand-based company producing a line of craft spirits, for the exclusive right to sell Broken Heart Gin in the United States. According to the company’s CEO, the letter of intent “is the next step in our quest to create a portfolio of ultra-premium, artisanal spirits.” On Wednesday, Montalvo Spirits rose 6.67% to $0.960 (TQLA has a 52 week trading range of $0.74 to $0.98 a share) for a market cap of $2.08 billion plus the stock is up 20% since early May.
Finally, here is a quick look at the performance of all three of the above liquor or wine stocks:
The Bottom Line. Again, there aren’t many small cap liquor or wine stocks left out there and that could be a good reason to at least take a closer look at what’s left.