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Castle Brands Inc. Message Board

  • investora2z investora2z Sep 20, 2013 6:34 AM Flag

    Huge run up

    A recent article on seekingalpha recommended to buy many of the stocks owned by Dr. Phillip Frost. Castle Brands was on the list. It has done great over the last few months, and is up 125% on a ytd basis. It has multiplied more than 2 times compared to its 52 week low made in February. There are many investors tracking his investments, and the analysts have praised his acumen at picking high potential businesses at extremely low valuations. IVAX is one of his biggest success stories, and the investments in OPKO Health (OPK) and some other companies have also done great. He owns stakes in pharmaceutical companies like Biozone Pharmaceuticals (BZNE) which have done well, and are expected to do even better based on the success of their products and technologies. Dr. Frost attempts to leverage the synergies between his companies. OPKO and Biozone have an agreement for testing of Biozone's proprietary QuSomes drug delivery technology. The SA article recommends to buy Castle Brands because of its huge potential, and the performance in the last quarter. For the quarter ended June 30, 2013, the sales increased by 7% to $10.4 million and the EBITDA improved by 54.9% to a loss of ($0.2) million. Dr. Frost has a 10% stake in the company. There are hopes that the company will make a turnaround over the next few quarters and years, and the stock will deliver great returns to the investors. However, the performance of the company in the next couple of quarters will be crucial in determining the probability and proximity of the turnaround. It is imperative that there is consistent improvement in the fundamentals else, there may be dampening of sentiments for the stock. The recent run up in the stock has made it a bit vulnerable to profit booking in case of slippages etc.

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