From www.insidewallstreet.com
Spa Faucet, Inc.(OTCBB: DRIP) "When A DRIP Becomes A Flood"
In an article in the Investors Chronicle newsletter this month, Jimmy Holton writes "Savvy investors that want higher yields will want to target small cap stocks that are projecting larger than average revenues and earnings increases. "California based Spa Faucet, which became public barely three months ago, exemplifies these growth characteristics. But, as a result of their "back door" IPO
through reverse merger, news of this profitable and fast growing company's success is still virtually unknown to investors.
Spa Faucet, Inc. has been manufacturing and distributing decorative faucets and accessories for 19 years. Until recently, Spa concentrated on low-quality, low-margin "loss-leader" products. As competition for low-end products intensified, the company changed its strategy, focusing on higher-quality, higher margin products that are price competitive with the top brands. With an infusion of working capital in late 1995, Spa Faucet was able to increase manufacturing
capacity leading to increasing sales and profits. Spa Faucet products are now carried in Home Depot, Lowes and other major hardware stores.
Even more exciting, company revenues which have grown the last few years are about to explode as SPA rolls-out national distribution and expands its product line. Spa currently offers over 40 items in chrome, porceline, brass and 24-Carat gold plate.
Already, in its first quarter since the merger, SPA reported .07 a share profit on $2.4 million in revenues for the three months ended 6/30/96. Based on current product orders, the company expects to exceed those figures in the next couple of quarters. Revenues for 1996 are projected to top $17 million with annual earnings of about .40-.50 per share.
Spa shares are currently traded on the OTCBB under the symbol: DRIP. The company has filed an application for a NASDAQ Small Cap listing pending submission of its initial form 10. A NASDAQ listing would greatly increase its exposure to investors and maket makers. More importantly, as word of Spa's earnings gains a wider audience, share prices are likely to trade at higher multiples.
Hot Stock of The Week at a glance:
Company Name: Spa faucet, Inc.
Ticker Symbol: OTCBB: DRIP
Company Contact:Leonardo Sudman
Address: 8926 Comanche Ave., Chatsworth, CA 91311
Phone:818-718-9305
7/19 Close: 5 7/8
52 week high*: 6 1/4
Low*: 5 3/8
Estimated float: 1 million
Shares Outstanding: 5.1 million
* 52 week high/low since 3/31/96 merger only |
