New Opportunity: Long Island Iced Tea Corp. (NasdaqCM: LTEA) The market has been an amazing ride lately, dealing out big pots to strong hands. But you don’t have to be big swinging Richard to get your piece of the action. Everything has been moving, with more speculative market segments blasting off in recent weeks following a first half of the year that saw leadership from the more conservative side of the market (utilities, staples, telecom, bonds, etc). Now, it’s like we’re suddenly back in 1999, and everything is at nosebleed levels. You have to decide between totally wrecklessly chasing or just partially chasing. Well, today’s new pick is a different angle: It’s a bounce setup in a stock that’s starting to look way, way too cheap given some of the morsels we were able to dig up. ltea logo Symbol: LTEA Company: Long Island Iced Tea Corp. Quote: http://finance.yahoo.com/q?s=LTEA Latest News: http://finance.yahoo.com/q/h?s=LTEA+Headlines Company Website: http://www.longislandicedtea.com Who is LTEA? Long Island Iced Tea Corp. (LTEA), through its subsidiary, Long Island Brand Beverages, LLC, produces and distributes iced tea. The company is currently organized around its flagship brand Long Island Iced Tea, a premium, ready-to-drink iced tea sold primarily on the East Coast of the United States through a network of distributors. LTEA has developed non-alcoholic, premium iced tea bottled beverages made with quality ingredients that are offered at an affordable price. The company also provides lower calorie iced tea in 12 ounce bottles. LTEA is headquartered in Long Island, New York, and sells its products to distributors who in turn sell to retail outlets in the East Coast of the United States. Business Outlook We see promise here for a few key reasons right now. First, there is clear value from traditional, “meat-and-potatoes” fundamental metrics:Trailing 12-month revs come in at $2.14M. And that number is the good version, with topline growth clocking in at a whopping +92% quarterly y/y increase right now. Second, the company is in a very strong market space: Ready-To-Drink Tea (RTD Tea) is growing fast and taking market share from similar beverage categories. Right now, RTD Tea is a $5.3 bln market with a 10% 5-year CAGR. RTD Tea in the “health and wellness” area of beverage is really the spot, with LTEA positioning itself as a soda alternative, and signs from the market that both Coke and Pepsi are starting to recognize that they are fighting a losing battle with their flagship products, as the healthier alternatives start to get increasing traction. Inside the niche, LTEA has a “sweetspot”, with Nielson market research suggesting a tremendous overlapping of trends. LTEA markets its key product as Corn-Free, Hormone and Antibiotic-Free, Non-GMO, Gluten-Free, Natural, and with no Artificial Coloring or Flavoring. Nielson tracks everyone of those market trends as in high-growth gear over the past year and four years (all are seeing annual CAGR rates in the double digits, with some as high as 20-40%). So, LTEA is in a strong segment, with many strong trends providing wind at their back and also seeing strong topline growth on the books. One big potential catalyst on the horizon: LTEA notes in a recent investor presentation that they are considering a potential entry into the much higher margin alcoholic beverage market. Catalysts in Play Of course, the big recent catalyst here is the July 29 announcement closing the company’s recent share offering. It went all common, with just shy of 1.25M shares leaving the nest at $5.50/share on the old “Best Efforts” standard, raising proceeds of $6,934,820. That was enough of a robust take to qualify LTEA for an uplisting to The NASDAQ Capital Market (official as of July 29, 2016, NasdaqCM), retaining its ticker “LTEA” through the transition. (See Full Press Release Here) This was no under-the-radar move either. The company actually rang the bell to open trade on the Nasdaq the day before. The company wanted to raise enough to make the whole effort worthwhile. But the trading market for this stock is a bit thin to absorb that kind of request for money by the company, which is why the stock has been hit. However, once it gets traction, we may see this snap-back now that they have fewer constraints on operational financing and a much more marketable exchange listing for shares. Just ahead of that, LTEA had a chance to beef up the executive team, appointing two senior executives. Julian Davidson, who first joined the Company in June 2015 as a consultant to assist in the execution of its growth initiatives, has been appointed as Executive Chairman of the Board of Directors of the Company. Additionally, Richard Allen, the former Chief Financial Officer of Snapple Beverages Group, has been appointed as Chief Financial Officer of the Company. (See Full Press Release Here). Technical Analysis This is where things really get interesting: The stock is trading on a float of under 2M shares, which is almost unbelievably small. That suggests that this thing may be capable of monster moves if it sees new interest. And, from what we can see, that’s already happening: LTEAshares have seen volume over the last couple weeks tracking 151% above its recent trailing quarter average levels. That’s a major surge. In addition, the offering was dilutive, and that was likely the big downward driver. But that’s in the past now. Stocks tend to focus more on the future. Now that we’ve seen it absorb that step, we know the weak hands have probably been flushed out. That process has deposited this stock right at long term support, as you can see in the chart below: About LTEA LTEA (Long Island Iced Tea Corp.), through its subsidiary, Long Island Brand Beverages, LLC, produces and distributes iced tea. LTEA is currently organized around its flagship brand Long Island Iced Tea, a premium, ready-to-drink iced tea sold primarily on the East Coast of the United States through a network of distributors. LTEA has developed non-alcoholic, premium iced tea bottled beverages made with quality ingredients that are offered at an affordable price. The company also provides lower calorie iced tea in 12 ounce bottles. LTEA is headquartered in Long Island, New York, and sells its products to distributors who in turn sell to retail outlets in the East Coast of the United States. LTEA’s website is www.longislandicedtea.com. Summary of Key Points: – LTEA has a small trading float of just 1.78M, which suggests the stock could launch higher on any additional influx of interest. – LTEA is making real money, with trailing revs already coming in at $2.14M. – LTEA is starting to see major topline growth, with quarterly y/y revs increasing at 92%. – LTEA is showing a clear surge in interest, with volume over the last couple weeks tracking 151% above its recent average levels. – LTEA is a new uplisting that has seen steep discounts in the action likely based on liquidity of its share market through a key offering. – LTEA is forming a potential RSI trough at almost 20, which suggests a rare level of overside potential. Conclusion In a market with such crazy moves, its easy to overlook something like LTEA right now. However, this stock has an interesting mix of key ingredients right now that suggest it could be a major sweetspot and offer up a tremendous opportunity. This is a tiny float stock with strong growth that just uplisted onto a major exchange. Technicals suggest it is both extremely oversold and testing key support. With volume mounting higher and higher at current levels, that tiny float can easily be pushed around. And one can easily manage to envision any number of potential coming catalysts that could really put some juice into this story.