This post will take a look at Jones Soda (NASDAQ:JSDA). I have been long this stock before, and even short for a brief time after the shares broke above $30. At the time, I felt the stock was way ahead of itself, and would surely need to come down. But I have to admit to covering my short position quickly, and not sticking to my convictions.
Nonetheless, the stock has endured a long slide to get back to Monday's level. Some of this was due to the company reporting earnings that didn't live up to lofty investors' expectations. Then last week, there was news that Starbucks (NASDAQ:SBUX) would stop selling its sodas in stores.
The CFO has since stated that the revenues received from the SBUX relationship account for less than 1% of current total revenues. That makes sense, as the Jones sodas were only sold in 40% of the locations, and most people are not running into Starbucks to buy a soda.
This year, JSDA signed broad distribution agreements with Wal-Mart (NYSE:WMT), Safeway (NYSE:SWY), Albertson's (NYSE:ABS), and Kroger (NYSE:KR) which should be huge. This is the main reason why the stock ran so far, so fast, earlier this year. It is also rolling out a national advertising campaign which should really help increase the brand awareness. And, it also got an exclusive beverage deal at Qwest Field in Seattle.
On Monday, the stock got upgraded by ThinkEquity Partners, which boosted it by more than +10%, on a big boost in volume. I think the upgrade is timely, as the stock has just tested its 200-day moving average, and is finding support. It is also very oversold, and likely due for a nice bounce.
Disclosure: The author is long JSDA.