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SodaStream International Ltd. (SODA) Message Board

  • goldenseth@ymail.com goldenseth Jul 27, 2013 10:46 AM Flag

    Today, Tomorrow, Next month, Next Year

    I had a conversation with a client el otra dia. He asked me, "Is there another company that is growing top and bottom line around 30% with prospects of doubling revenues over the next two years, unusually high barriers to entry, brand dominance, market leading technology and strong executional performance year-over-year"? Answer: "Those companies do exist, but they are few an far between".

    So investors can argue, kick, scream and complain today, maybe even tomorrow and next month for all I know, but keep the aforementioned conversation in mind. You might even care to keep the company's capex guidance in sight as well. Maybe print out the slide from the Investor Day presentation and put it on your refrigerator as a reminder. As Cold and I discussed previously, Capex is supposed to peak this year with next year's capex guidance reduced by roughly 50%. Consider sales going flat and a reduction in capex by 50% and what do you have, yes that's right, pretty nice profit increase year over year based on little more than a reduction in capex. Selling syrup and gas doesn't take much capex once the new manufacturing facility is deployed. But its extremely unlikely that sales go flat as the company continues to drive successful user base expansion and usage rates increase. Now maybe consider capex reduction of roughly 50% combined with the normal, historical growth rate SODA is exhibiting. Maybe that is why the top institutional holders have yet to alter there positions?

    There's only around 22 million shares in the float amigos! In very much the same way the share price decline is attributed in part to the relatively small float, so is the share price appreciation when it has occurred. So maybe if you're an investor those trees are a little more monolithic at this time, but consider a print out of capex and your refrigerator as what the forest can really look like.

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SODA
18.43+0.17(+0.93%)Mar 4 4:00 PMEST

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