Critical Analysis: True Drinks (TRUU) & ChromaDex (CDXC)

True Drinks (OTCMKTS: TRUU) and ChromaDex (NASDAQ:CDXC) are both small-cap consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

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This table compares True Drinks and ChromaDex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
True Drinks -165.55% -476.68% -141.06%
ChromaDex -48.68% -52.15% -40.36%

Analyst Recommendations

This is a summary of recent recommendations for True Drinks and ChromaDex, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
True Drinks 0 0 0 0 N/A
ChromaDex 0 0 2 0 3.00

ChromaDex has a consensus target price of $7.50, suggesting a potential upside of 80.72%. Given ChromaDex’s higher probable upside, analysts clearly believe ChromaDex is more favorable than True Drinks.

Institutional and Insider Ownership

10.2% of ChromaDex shares are held by institutional investors. 10.1% of True Drinks shares are held by insiders. Comparatively, 11.6% of ChromaDex shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

True Drinks has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, ChromaDex has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Valuation & Earnings

This table compares True Drinks and ChromaDex’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
True Drinks $2.58 million 1.26 -$5.44 million N/A N/A
ChromaDex $21.20 million 10.74 -$11.37 million ($0.35) -11.86

True Drinks has higher earnings, but lower revenue than ChromaDex.

Summary

ChromaDex beats True Drinks on 9 of the 11 factors compared between the two stocks.

True Drinks Company Profile

True Drinks Holdings, Inc. develops, markets, sells, and distributes naturally flavored water in the United States. The company offers AquaBall Naturally Flavored Water, a vitamin-enhanced and naturally flavored water drink. It also markets and distributes Bazi All Natural Energy, a liquid nutritional supplement drink. True Drinks Holdings, Inc. distributes its products through various retail channels, such as grocery stores, mass merchandisers, drug stores, and convenience stores, as well as through online retailers. The company was formerly known as True Drinks, Inc. and changed its name to True Drinks Holdings, Inc. in October 2012. True Drinks Holdings, Inc. was founded in 2008 and is headquartered in Irvine, California.

ChromaDex Company Profile

ChromaDex Corporation, a natural products company, discovers, acquires, develops, and commercializes patented and proprietary ingredient technologies. The company offers bulk raw materials for use in dietary supplements, food, beverages, and cosmetic products; Nicotinamide riboside (NIAGEN), a vitamin found naturally in milk for enhancing cardiovascular health, glucose levels, cognitive function, and anti-aging effects; Pterostilbene (pTeroPure), a polyphenol and antioxidant used in health related fields; and Immulina, a spirulina extract and compound, which is used for improving human immune function, as well as developing Pterostilbene and caffeine co-crystal ingredients, and anthocyanins ingredients. It also provides reference standards, materials, and kits to conduct quality control of raw materials and consumer products; and fine chemicals and phytochemicals for research and new product development applications. In addition, the company offers a range of contract services, including routine contract analysis for the production of dietary supplements, cosmetics, foods, and other natural products, as well as elaborate contract research for clients in these industries; and consulting services in the areas of regulatory support, new ingredient or product development, risk management, and litigation support, as well as product regulatory approval and scientific advisory services. Further, it assists customers in creating processes for manufacturing of natural products using green chemistry, as well as developing quality verification seal program, phytochemical libraries, plant extracts libraries, and databases for cross-referencing phytochemicals. The company markets and sells its products directly in the United States and Canada; and through distributors in Europe, China, Japan, South Korea, Brazil, Australia, New Zealand, Taiwan, South Africa, India, Indonesia, Malaysia, Singapore, Thailand, and Mexico. ChromaDex Corporation is based in Irvine, California.

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