Nov 25, 2024
It seems NBA hall-of-famer Kobe Bryant showed as much hustle in the boardroom as he did on the basketball court.
In 2013, the Los Angeles Lakers guard acquired a 10% stake in sports drink startup BodyArmor for $6 million, according to The Wall Street Journal. The brand billed its products as a healthier alternative to its competitors.
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After several years of rapid growth, in 2021, Coca-Cola bought full control of BodyArmor for $5.6 billion — after initially buying a 15% stake in 2018 — netting Bryant’s estate $400 million, per The Journal. The basketball star, who retired from the NBA after the 2015-16 season, served on BodyArmor’s board before he died in a helicopter crash in 2020.
Co-founder Mike Repole says Bryant’s early investment and involvement boosted the company’s ability to grow swiftly.
"If it wasn't for Kobe Bryant's vision and belief, BodyArmor would not have been able to achieve the success we had," Reploe said in a press release.
Bryant also wrote and co-directed some of the company’s ads, according to ESPN, which featured fellow athletes James Harden, Kristaps Porzingis, Mike Trout and Skylar Diggins-Smith.
In the end, Bryant’s investment in BodyArmor delivered a nearly 67-fold return or a compounded annual growth rate of 69% over eight years.
Now, while everyday investors probably don’t have the same amount of capital or influence Bryant had, they may want to consider deploying a similar blueprint — spotting an undervalued company with growth potential. Those with an interest in the beverage world may want to take a look at some of these small-cap consumer brands.
Celsius
Energy drink maker Celsius (NASDAQ:CELH) has had a difficult year. The stock was down around 50% year-to-date as of Nov. 22.
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However, the underlying financials seem to tell a different story. Celsius announced $757.7 million in revenue during the first half of 2024, up 29% from the previous year. It also reported gross profit increased 43% to $391.3 million over the same period.
The company maintains a distribution partnership with PepsiCo, which may help it gain further market share from its larger rivals. Investors keen for a contrarian bet in the energy drink market might want to keep a close eye on this stock.
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Vita Coco
Although the Vita Coco Company (NASDAQ:COCO) has a broad portfolio of beverage brands, the flagship coconut drink is its most important asset. It reported, as of June 30, the brand had about 50% market share in the U.S. coconut water segment, making it a leader in this niche category.
Vita isn’t a grande story, as net sales declined 4% in the third quarter of 2024 while remaining flat year-to-date. However, it’s an inexpensive stock for bargain hunters, and the company does have a market cap of $2 billion.
Value investors looking for a low-risk, low-valuation stock could add Vita Coco to their watchlist.
Keurig Dr Pepper
Although Dr Pepper is a 139-year old brand, for much of its history it’s been a distant competitor to rivals Coca-Cola and Pepsi. However, after recent investments in new marketing the brand, as of June, it had managed to become America’s second-most popular beverage, according to The Wall Street Journal, citing sales data from Beverage Digest.
Despite this unlikely achievement, Keurig Dr Pepper (NASDAQ:KDP) appears to remain an undervalued and overlooked stock. It currently offers an attractive 2.81% dividend yield.
The company could attract more attention and investment if it manages to cement its position as a top-tier soda brand.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
