Coffee Holding Co. Inc. (JVA) Continues Gains after Strong Earnings
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    Stock Alert for Coffee Holding Co. Inc. (JVA)

    Coffee Holding Co. Inc. (JVA) is an integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. The Company’s core products can be divided into three categories: Wholesale Green Coffee, Private Label Coffee and Branded Coffee. The Company’s private label and branded coffee products are sold throughout the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi-unit retail customers.

    Share Statistics (01-Sept-11) FY2009 FY2010 % Chg Q22010 Q22011 % Chg
    Symbol JVA Revenue, $Mn 74.45 83.49 12.1% 19.92 37.33 87.4%
    Current price $17.80 Gross marg. 13.4% 12.6% -6.0% 14.3% 9.6% -32.9%
    52wk Range: $3.67-$30.98 Oper. margin 4.8% 4.9%
    Avg Vol (3m): 1,476,720 Net margin 4.4% 2.9% -34.1% 4.0% 3.2% -20.0%
    Market Cap. 98.44M
    Shares Outstanding 5.49M EPS, $ 0.37 0.44 18.9% 0.15 0.22 46.7%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    JVA traded as much as 5.8% higher on Thursday on volume of over 900K shares.  Over the last 52 weeks, the stock has ranged from a low of $3.67 to a high of $30.98.  ALTI is currently trading below its 50-day moving average of $18.95 and above its 200-day moving average $10.93. Market capitalization currently stands at 98.44  million and it has 5.49 million outstanding shares.

    Shares of JVA have gained 16.1% in the last five days, though the stock dropped 15.6% in the last month.  Year-to-date, the stock is up 286.4%.

    On August 30, JVA filed an 8K with the SEC showing certain preliminary financial information about its sales and cost of sales for the three months ended July 31.  The Company said it became aware that there is certain information int he marketplace regarding its operating results for the said period, prompting it to provide the initial results.

    For the three months ended July 31, 2011, JVA’s sales are expected to be approximately $35.7 million and costs of sales are expected to be about $33.6 million or 94.2% of net sales. It said the increase in cost of sales reflects the increased cost of green coffee.

    The preliminary figures are subject to finalization in connection with the preparation of the JVA’s Form 10-Q report for the quarter ended July 31, 2011.

    Source: http://filings.issuerdirect.com/data/1007019/000135448811003155/jva_8k.pdf

    Financial Summary

    The Company had net income of approximately $1.19 million, or $0.22 per share (basic and diluted), for the three months ended April 30, 2011 compared to net income of $800,448 or $0.15 per share (basic and diluted), for the three months ended April 30, 2010. The Company had net income of $2.23 million, or $0.41 per share (basic and diluted), for the six months ended April 30, 2011 compared to net income of $1.33 million, or $0.25 per share (basic and diluted), for the six months ended April 30, 2010. The increase in net income primarily reflects increased gross profit.

    Net sales totaled about $37.33 million for the three months ended April 30, 2011, an increase of about $17.41 million, or 87%, from $19.92 million for the three months ended April 30, 2010. Net sales totaled $62.97 million for the six months ended April 30, 2011, an increase of $21.70 million, or 52%, from $41.28 million for the six months ended April 30, 2010. The increase in net sales reflects higher sales prices compared to the second quarter of fiscal 2010 as well as additional poundage sold due to the addition of its subsidiary, OPTCO, as well as additional sales of green coffee to new customers.

    Cost of sales for the three months ended April 30, 2011, was approximately $33.73 million, or 90.3% of net sales, as compared to $17.07 million, or 85.7% of net sales for the three months ended April 30, 2010. Cost of sales for the six months ended April 30, 2011, was $56.29 million, or 89.4% of net sales, as compared to $35.79 million, or 86.7% of net sales for the six months ended April 30, 2010. The increase in cost of sales reflects the increased cost of green coffee, the addition of its subsidiary, OPTCO, as well as a greater shift in the percentage of sales of green coffee from roasted coffee sales.

    Total operating expenses increased by $210,787, or 13.37%, to $1.79 million for the three months ended April 30, 2011, as compared to operating expenses of $1.58 million for the three months ended April 30, 2010. Total operating expenses increased by $309,733, or 9.78%, to $3.48 million for the six months ended April 30, 2011, as compared to operating expenses of $3.17 million for the six months ended April 30, 2010. The increase in operating expenses was due to increases in selling and administrative expense due to a higher level of business during this period as well as in increase in officers’ salaries of $30,000.

    Source: http://ir.issuerdirect.com/jva/read_press_release/1778

    Financial Strength (01-Sept-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.32 0.92 0.62 0.75
    Current Ratio (MRQ) 2.15 1.37 0.88 1.10
    LT Debt to Equity (MRQ) 0.00 20.93 20.77 112.98
    Total Debt to Equity (MRQ) 9.89 33.27 30.20 153.21
    Interest Coverage (TTM) 27.62 0.24 0.58 22.77

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among two polled investment analysts. Against the Coffee Holding Co Inc company.

    Analyst Detail

    Buy

    Outperform

    Hold

    Underperform

    Sell

    No Opinion

    Latest 1 0 0 1 0 0
    4 weeks ago 1 0 0 1 0 0
    2 months ago 1 0 0 1 0 0
    3 months ago 1 0 1 0 0 0
    Last year 0 0 0 0 0

    Source: markets.ft.com

    Technical Analysis

    Source: http://stockcharts.com

    JVA is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent price action.

    JVA’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Sept01-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    The Kroger Co. KR 23.55 14.25B 11.95 10.75 0.16 0.15
    The J. M. Smucker Company SJM 72.13 8.24B 14.06 12.93 1.44 1.43
    Kraft Foods Inc. KFT 34.88 61.60B 15.30 13.79 1.14 1.09
    Processed & Packaged Goods Median       16.56 n/a 0.97 n/a
    Coffee Holding Co. Inc. JVA 18.05 99.09M 23.44 20.06 0.86 0.72

    Source: Thomson Financial

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