SODA came out with better than expected results but downgraded their forward looking growth forecast. By holding to their 30% growth forecast for fiscal year 2011 they implied a growth rate of 20% in the second half of the year as opposed to 40% in the first. That's why it dropped so drastically. "High flers" need to maintain their sales growth trajectory or exceed it. When they fail to do so, they/investors get punished severely.
In Dec. 2010 GMCR came out with better than expected 3rd quarter earnings but they also lowered guidance for the 4th quarter. The stock lost 20% the next day. The next quarter GMCR again came out with good earnings but this time they raised their guidance and it was "off to the races".
It seems that SODA may be on a similar track. IMO they were overly conservative on their second half growth estimates based on their comments in the conference call as GMCR was in 2010. If so, Longs may be rewarded again when SODA comes out with 3rd quarter earnings. Until then we will have to look for a major positive announcement such as a distribution deal with Target etc. to put some real "juice" back in the stock price. IMO.
If you check the GMCR posts back in Dec. 2010 you'll find that Cramer trashed GMCR as well and you will also find hundreds of posts like - "This company is a POS!!" - "JUST A FAD!" etc.
As Yogi said "It's Deja Vu all over again".
IMO this company is not a POS and it definitely is not a fad. Mgt. made a miscalculation by being overly conservative in their growth estimates. We shall see.
I'm new to this stock SODA. Just "discovered" it only yesterday via a trader's tip!
I'm surprised at the steep sell-off in SODA share today, a -40% haircut despite of a beat and revenue increase.
From the chart, SODA is now back to the level $42-$44/share, right before the stock charged a break-out on May 17, 2011.
Imagine all the SODA gain from May 17 through August 1 when SODA rose from $40/share to $79/share in 3 months ---> just went kaput today at -40% haircut if any investor has not taken any profit from this SODA 3-month gain! OUCHY!!!
Didn't know SODA is an Israel company ---> Time to bail out of SODA tomorrow since I'm a big investor/trader of U.S. companies and not very fond of foreign companies.
SodaStream International Ltd. (SODA) Chief Executive Officer Daniel Birnbaum said his company will benefit from slowing U.S. economic growth and advised investors not to expect changes in profit guidance even as the stock sank 34 percent.
The Israeli producer of homemade soda machines posted a record decline in New York yesterday after the company that trades at four times average valuations on the Nasdaq Stock Market disappointed investors by not raising its 2011 earnings outlook. Shares dropped to $45.56, marking the worst performance among 2,605 stocks in the Nasdaq index.
SodaStream, whose single product can turn tap water into over 100 flavors of soda in refillable bottles, will benefit from a U.S. slowdown as consumers seek to save more, Birnbaum said in an interview yesterday. American households are becoming increasingly concerned about the economy after consumer confidence dropped last week to the lowest level since mid-May, the Bloomberg Consumer Comfort Index showed yesterday.
“SodaStream is right for America, we’re going to build this business one household at a time,” Birnbaum said from the company’s headquarters in Airport City, Israel. “We’re going to focus on that and not on the stock performance. The stock performance will follow the growth of the business.”
Prior to yesterday, the company was up 185 percent since its Nov. 2 initial public offering, the biggest gainer among companies that listed shares in the past year in the U.S. SodaStream trades at 66 times reported profit compared with the 16 average for companies traded on Nasdaq.
Spot on. Correctamundo.
Just thinking that some patience with a good idea company like SODA should be rewarded.
Wish I could interpret all the block sales in the HUGE volume today. Was not able to watch the tape, if they showed. I think it was some hot money and a bunch of short churning. You really can't blame SODA management for being conservative about future outlook. They will fare better in the long run than to "flash in the pan" the thing right now. That would be irresponsible, IMO.
Bought more at $44. The last batch I bought was at $67, so that is an ouch! But average cost is much lower.
While I wouldn't bet the farm on SODA, I do believe it has a long way to go and I will hang on to the core position for at least 5 years.
But they guided in Line- not down.Obviously the CEO bungled this badly- he could have couched his language. The more I think about it the more sickening it is- a 20$ demolition because the CEO refused to guide higher- what does oppenheimer have to say- they put a target of 80 per share- will they now bring back their price down-just because the CEO guides in Line(Not down- mind you).This is totally BS and rigged!
Yes but no. 30% growth annually is in line except that they ran at a 40% pace in the first half. Therefore a decline to 20% growth rate in the second half of the year (which SODA did not dispute) from a 40% growth in the first half of the year does not endear a high multiple company to the street. In other words, based on second quarter results the street would have expected SODA to raise their full year growth rate which they didn't. Without revising full fiscal year growth rate Soda mgt. let the analysts walk away with this growth picture -
Q1 - 53%
Q2 - 38%
Q3 - 20%
Q4 - 20%
Not a very exciting picture to say the least.
If 3rd quarter results significantly beat a 20% growth rate and the outlook is revised upwards, things will change for the better. This is very doable IMO as the US sales segment becomes a larger and larger percentage of overall sales.
He was talking about arithmetic not growth. That was a mistake. Jews are always afraid they will get in trouble for making a mistake. He was so afraid to overstate his case for success he didn't realize that was a mistatke.