Even though you're reading this now, odds are that three weeks ago you'd never even heard of Drinks Americas Holdings, Ltd. (OTCMKTS:DKAM). And, like so many other young, nano-cap stocks, it would be easy to assume the current strength being exhibited by DKAM is nothing but a short-term phenomenon, meaning there's no particular reason to jump on the stock now. If there was ever a reason to jump onto a micro cap name for a quick trade though, this may be it.
As the name suggests, DKAM is a beverage stock. Specifically, Drinks Americas Holdings, Ltd. is the distributor of well-known alcoholic beverages like KAH Tequila, Old Whiskey River Bourbon, Rheingold Beer, Chili Devil Beer, and Red Pig Ale, just to name a few. Sales have been decent too, relative to the market cap of $265,000 - the company has generated $6.3 million worth of revenue over the prior four quarters. It's not turned any of that revenue into profit, mind you; the organization lost $11.7 million over the course of the same timeframe. Then again, it's not as if the market is actually looking for net income here. It's a young company, and still in a high-growth phase. Traders are willing to give the company time to get the proverbial ball rolling, and it seems to be using that time wisely.
None of that, however, has a thing to do with the fact that Drinks Americas Holdings, Ltd. has become a very trade-worthy stock in just the past few days. There are two other, semi-related reasons DKAM is off and running.
The first one is admittedly not an ideal one - Drinks Americas Holdings was the beneficiary of a paid promotion. The perk-up and higher volume for DKAM seemed to start around the time the promotion kicked in. It was a very small promotion though, so it's difficult to attribute the stock's 300% gain entirely to the table-pounding. The bigger reason the stock's gaining strength - and is likely to maintain that strength for more than a few days - is a much healthier underpinning. That reason? Drinks Americas Holdings, Ltd. has gotten decidedly serious in just the past few weeks about stirring up attention for, and interest in, its stock.
As proof of the newfound love for PR, DKAM has issued seven press releases since the beginning of November. Prior to that, Drinks Americas Holdings had only issued five press releases all year long. That's a big paradigm shift, and given the positive impact the company has seen from the effort, odds are that it will continue with the publicity work, and keep the stock moving upward. Time to take a swig.
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