ProfyB (90.42)

Jones Soda

September 17, 2009 – Comments (4) | RELATED TICKERS: JSDA

I really want to like Jones Soda stock, I really do.  I love pure cane sugar soda and especially the unique flavors that Jones Soda has.  They're scaling back on the canned business, which they should because soda tastes better out of a bottle and the canned business puts them closer to the same market as giants like Coca Cola.  They also operate with almost no debt and have over half their market cap in cash.  Insiders have also been buying lately.

The kicker is that they had twice as much cash a year ago.  That and they've been losing an absurd amount of money for the past couple of years.  They have 15 million in cash left and in 2008 they lost... 15 million.  The last few quarters have only seen smaller losses, but they are losses still.  They've also been losing distributors like Walmart and Starbucks.  

If I knew more about the soda business I'd be better qualified to make a decision on this, but I don't other than I like drinking soda and that Coca Cola and Pepsi dominate.  Investing in the underdog that is losing money is a risky proposition.  Of course if Jones Soda does recover, then now would be a better time to invest since the stock price will go up if they become profitable.  However, I do like to play it safe so I'm either going to wait until I have more information or until Jones Soda reaches profitability that puts it at a decent valuation.