Critical Survey: Drinks Americas (OTCMKTS:DKAM) & Farmer Brothers (NASDAQ:FARM)

Drinks Americas (OTCMKTS:DKAM) and Farmer Brothers (NASDAQ:FARM) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, valuation and earnings.

Earnings and Valuation

This table compares Drinks Americas and Farmer Brothers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Drinks Americas	N/A	N/A	N/A	N/A	N/A
Farmer Brothers	$342.28 million	0.11	-$14.52 million	($0.68)	-2.62

Drinks Americas has higher earnings, but lower revenue than Farmer Brothers.

Analyst Ratings

This is a breakdown of current ratings and target prices for Drinks Americas and Farmer Brothers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Drinks Americas	0	0	0	0	0.00
Farmer Brothers	0	1	0	0	2.00

Farmer Brothers has a consensus price target of $2.50, indicating a potential upside of 40.45%. Given Farmer Brothers’ stronger consensus rating and higher possible upside, analysts plainly believe Farmer Brothers is more favorable than Drinks Americas.

Profitability

This table compares Drinks Americas and Farmer Brothers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Drinks Americas	N/A	N/A	N/A
Farmer Brothers	-4.24%	-16.12%	-3.84%

Institutional and Insider Ownership

64.5% of Farmer Brothers shares are owned by institutional investors. 4.6% of Farmer Brothers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Drinks Americas has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Farmer Brothers has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.

Summary

Farmer Brothers beats Drinks Americas on 6 of the 9 factors compared between the two stocks.

About Drinks Americas

Drinks Americas Holdings, Ltd. produces, imports, distributes, and markets premium wine and spirits, and alcoholic beverages to beverage wholesalers in the United States and internationally. The company offers premium authentic Mexican beer products under the brand names of Day of the Dead Beer, Mexicali, Rio Bravo, Red Pig, and Chili Beer. The company also markets and distributes non-alcoholic beverages. It offers its products through various retailers and restaurant chains. Drinks Americas Holdings, Ltd. was founded in 1986 and is based in Los Angeles, California.

About Farmer Brothers

Farmer Bros. Co. engages in the roasting, wholesale, equipment servicing, and distribution of coffee, tea, and other allied products in the United States. The company offers roast and ground coffee; frozen liquid coffee; flavoured and unflavoured iced and hot teas; culinary products, including spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, and syrups and sauces, as well as coffee filters, cups, sugar, and creamers; and other beverages comprising cappuccino, cocoa, granitas, and other blender-based beverages and concentrated and ready-to-drink cold brew and iced coffee. It also engage installation, repair, and refurbishment services for an array of coffee, tea, and juice equipment. The company serves small independent restaurants, foodservice operators, and large institutional buyers and national account customers. The company distributes its products through direct-store-delivery network, and common carriers or third-party distributors, as well as website. The company was founded in 1912 and is headquartered in Northlake, Texas.