CELH Gives Traders a Jolt of Income

CELH

We just wrapped up our 10th Annual Investor’s Blueprint Live conference in Boca Raton, Fla. The three-day event featured live training and trading sessions where we focused on income-generating strategies. It was great to see many of you in person and connect with other members virtually as I manned the online chatroom. 

In addition to it being a busy week for us in terms of live in-person trading in Boca, it was a busy week of closeouts for Options Income Weekly members. We booked five winning trades, pocketing $328 in our live account and averaging a 1.2% return per trade. 

This was our first time trading SolarEdge Technologies (SEDG), a clean energy company that developed an DC optimized solar inverter system.

Other names on the list we’ve had success trading before, including Celsius Holdings (CELH), the popular energy drink maker. 

Celsius claims to offer a healthier alternative to traditional energy drinks, with “no sugar, no aspartame and no high fructose corn syrup,” “calorie-burning properties” and “healthier ingredients such as ginger, guarana, green tea and 7 essential vitamins.” Each can contains 200 milligrams of caffeine, which is twice as much as your average cup of coffee, while Celsius Heat contains 300 milligrams. So, they pack quite a punch. And they come in a wide range of flavors/“vibes.”

The drinks have become popular in the fitness community, as well as with teens and overworked adults. I will admit that I’m hooked on the stuff, particularly the sparkling Kiwi Guava flavor. I made sure to stock up when I arrived in Florida with enough cans to get me through Investor’s Blueprint Live. 

Founded in 2004, the company is headquartered, funnily enough, in Boca Raton. Celsius has greatly expanded its retail presence over the past few years and is now available in tens of thousands of stores across the country, as well as online through major retailers. Personally, I get a case shipped to my house from Amazon (AMZN) every two weeks. 

At the end of 2023, Celsius was the No.3 energy drink in the United States, according to Circana. Its 10.5% market share was more than double its market share from a year prior. Celsius’ expansion efforts have been helped by a $550 million investment from PepsiCo (PEP) last year. The long-term distribution agreement gives Pepsi an 8.5% stake in the company and should help support Celsius’ rapid growth efforts.

In November, Celsius reported record third-quarter revenue of $385 million, up 104% from a year ago. North American revenue was up 107% year over year, while international revenue increased 56%. Q3 adjusted EBITDA soared 318% to around $104 million thanks to the improvements in revenue and gross margins.

Full-year 2023 results are expected to be reported in early March. Analysts anticipate revenue will nearly double, while they are calling for EPS of $0.76 versus a loss of $0.88 in 2022. 

Investors have been rewarding the growth stock. In the past year, CELH is up 80%, and shares have more than tripled in price in the past two years.

The surge in popularity of the product and the stock price is reminiscent of Monster Beverage (MNST), one of the best-performing stocks of the past two decades. 

For option sellers like us, CELH has a high IV rank, currently above 75%. We began trading the stock in the Options Income Weekly program in September 2023. We’ve closed three profitable trades in a row since then, averaging a 1% return per trade. 

After our most recent CELH closeout, we waited just a few hours before entering a new trade on the stock. This time, with shares trading around $56, we sold the CELH 23 Feb 50 Put for $0.51, or $51 per contract. We set a target exit price of $0.05. And with shares approaching the $59 level, we’re on track to hit that target well ahead of expiration. 

We’ll look to keep trading this growth stock for income while being mindful of the upcoming earnings report. We anticipate it being a solid income generator for us in the months ahead.

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