Seeking Alpha
Special situations, contrarian, event-driven, bonds
Profile| Send Message|
( followers)  

"I believe humans get a lot done, not because we're smart, but because we have thumbs so we can make coffee."


Ok, now on to making money.

While Coffee Holding Company (NASDAQ:JVA) may not be a direct competitor to Starbucks (NASDAQ:SBUX) any time soon, the company does offer a great value in the delightful coffee industry. We all know a great cup of coffee keeps the world spinning, and it is also common knowledge that people will skimp on their breakfast before their coffee. To be able to invest in a $20MM market cap, family owned and operated business for a P/E ratio of 9 is a no-brainer.

From CoffeeHolding.com:

Coffee Holding Co., Inc. (CHC) is a family operated business for over 30 years. The management and operating team at CHC represents three generations of committed, knowledgeable professionals.

Andrew Gordon, President, CEO and CFO
Andrew Gordon has served as Chief Executive Office, President, Treasurer and in the capacity of director since 1997 and as Chief Financial Officer since November 2004. He is responsible for managing our overall business and has worked for Coffee Holding for over 21 years, previously as a Vice President from 1993 to 1997. Mr. Gordon has worked in all capacities of our business and serves as the direct contact with our major private label accounts. In addition, Mr. Gordon publishes a weekly report that is distributed to our customers and is perceived by many of his peers and customers as a coffee market expert. Mr. Gordon received his Bachelor of Business Administration degree from Emory University. He is the brother of David Gordon.


David Gordon, Executive Vice President and COO
David Gordon has served as Executive Vice President—Operations, Secretary and one of our directors since 1995. He is responsible for managing all aspects of our roasting and blending operations, including quality control, and has worked for Coffee Holding for over 23 years, previously as an operating Manager from 1989 to 1995. He is a charter member of the Specialty Coffee Association of America. Mr. Gordon attended Baruch College in New York City. He is the brother of Andrew Gordon.


Sterling Gordon, Founder
Sterling Gordon founded Coffee Holding Co., Inc. in 1971. He possesses over 50 years of experience in the coffee business during which time he has developed a reputation in the industry as an expert in coffee blending and quality. He is the father of Andrew and David Gordon.


Also, insiders still own 53% plus of the float, and I doubt they will be willing to sell at the $4.00 level. The float is currently listed as being only 1.42MM according to Yahoo!Finance. That means ANY positive news, and this stock is above $5.00 in the blink of an eye. A 25% gain in this market is nothing I am willing to pass up.


From their website regarding the newest coffee sensation to enthrall the elites, artists, and youths of America, Specialty Green Coffee.

"Coffee Holding Inc. purchases only the finest specialty green coffee from around the world. The coffees are cupped prior to shipping from origin and upon arrival in the United States must meet our demanding standards. Our cupping team includes Sterling, David, and Karen Gordon who collectively have over 75 years of experience. Everyday we cup new offerings from around the world striving to provide the best selection for our roasting clientele. We have grown our offerings to include Organic, Fair Trade, Rainforest Alliance, and Utz Kapeh certified coffees. Using our roasting experience and years of industry knowledge, our helpful staff is willing to aid all of our customers in selecting a single origin offering or the blend that works best for their business."


The bottom line is, you get an extemely under-valued coffee company including a family-based management team with more than half a century of experience in the coffee business. It also has its own incentives clearly aligned with shareholders with sizable insider stakes in the company. The fact that this equity's price remains so subdued is greatly influenced by the lack of public recognition of this security. I would put a true intrinsic value of this company based on buyout potential at this moment at approximately $7.50.

Disclosure: I am long JVA.

Source: It May Be Time to Load Up on Coffee Holding Co.