An Encouraging Sixth Clinical Study For Celsius Sparks a Rally Print E-mail
By Vinny Cassano   
Wednesday, 24 March 2010 20:27

Celsius Holdings announced the results from the latest clinical study measuring the effectiveness of the drink when combined with moderate exercise.

This sixth study, according to the PR, demonstrated that those who consumed a can of Celsius shortly before engaging in moderate exercise enjoyed 78% more fat loss and a 114% decrease in body fat percentage than those who did not use the product.

The chief researcher of the study was Jeffrey R. Stout, PhD and the results were presented at the American College of Nutrition and published in the Journal of Strength and Conditioning Research.

Each study thus far has reinforced the company's claims of the calorie burning and fitness-enhancing benefits of the product, although none of the studies have yet been endorsed by the US FDA.

In addition to announcing the stellar results from the latest study, the company also announced the launch of a new campaign that labels Celsius as "Your Ultimate Fitness Partner". Accompanying the new slogan and fitness campaign will be a series of Ultimate Workout Challenges that are due to begin in May, as described on the new "Ultimate Fitness Partner" website.

Up until this point we haven't heard too much from the company's celebrity spokesman, Mario Lopez, but it's probably safe to assume that Lopez - being a fitness buff himself - will play a fairly significant role in advertising the upcoming workout challenges.

For the day on Wednesday, after the study results were announced, shares of Celsius Holdings enjoyed the best trading day in months (from a long perspective) and rallied to close twenty percent higher on volume nearly five times the daily average.

I'm of the opinion that the study results alone are not what led to the fairly significant price rebound, because the product's fitness-enhancement benefits have been known for some time, but it is possible that the study results - in combination with a growing advertising and awareness campaign - are drawing enough new interest to the stock to spark such a spike.

It's also possible that there is something else brewing behind the scenes that retail investors have not been clued into just yet, such as unannounced, major distribution or surprising first quarter numbers.

That said, one day does not qualify a full rally, so the trading action for the rest of the week could be more telling as to whether or not the renewed energy demonstrated by CELH on Wednesday is for real or not.

It's been a long time coming, but this company is taking measured steps to position itself as a leader in the health and fitness beverage market, coming as a healthy alternative to sugar-laden energy and soft drinks.

CEO Steve Haley recently offered $25 million as an estimate for total 2010 earnings - in addition to becoming cash flow break-even - and if those numbers are approached, then this stock has plenty of room to grow.

There's still a very strong and determined team of Celsius 'Get Bash Crew' members that spend countless hours day and night on the Internet trying to discredit this company, so the volatility is certainly not yet over, but as awareness and distribution grow, Celsius could emerge as a big player in the healthy beverage market.

The latest study was encouraging, but it's my belief that this news could just be the tip of the iceburg for what's to come in 2010.

As always, each investor should do their own DD and come to their own conclusions and invest accordingly.

Disclosure:  Long CELH.

Vinny also authors the popular investing blog VFC's Stock House.

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