IMHO it is a mistake to reduce advertising. Hopefully Europe will continue to offset the US until they can better dial in an effective marketing plan. At the end of the year they will have more $ available for the holidays as the plant expenses will be largely wrapped.
One day Sodastream will be in China. The water supply as in India is a concern. Sodastream doesn't want consumers using it's system with contaminated water. One day Soda will be in all of these locations. For now, it remains an upper, middle class consumer good.
You and I have a different perspective and a different timeline. But, my post explains while I'm still in Soda stock and accumulating. Soda is a small part of my portfolio and I can afford to let this dog hunt for a bit longer.
I had an email from Seth last week. He keeps subscribers up to date. He isn't responsible for the stock price. I'm glad the stock is on sale. I'm a buyer.
Later this year Sodastream's new plant will be fully operational. There will no longer be a problem with disputed territory. Pepsi will sell syrup into the Sodastream system once this area of controversy resolves. The timing works out well because Pepsi is not going to let Coke have all the limelight with GMCR during the holidays.
Also, free cash flow will start to climb. User base is continuing to expand. More marketing. I bought more stock this morning. Still waiting to pull the trigger on massive (for me) buy if it drops into the 20s.
Other stocks are doing well, apple, FB, safm, jpm, mcd, tcap, sbux. Sold ebay. Still sitting on bac. Also pzza, and dnkn. Intend to keep Soda long-term and let it play out. GMCR cold is still vaporware and completely unproven that the market will accept it.
20% discount and I'm buying a Kitchenaid Soda machine. Sodastream covers all segments of the market. When you have an expensive kitchen (not me), you like to show off your stuff.
Index rebalancing winding down and selling pressure reduced. The las t few months buying opportunity was phenomenal. Good, diversified businesses on sale.
The market is irrational. It works to your favor. Sodastream is at a 2 year low. Sentiment is terrible. But Soda is still growing it's user base. Still has hyper growth in Europe. Still adding distribution in the US. Pepsi and Starbucks in the wings. Patience is a virtue. The story isn't over.
Soda will have their new plant operational in the next 9 months. They will no longer depend on disputed territory and workers. At that point in time major, international brands will be more willing to partner with Soda.
I've been adding over the past few weeks. Buy low. Be patient. All it will take is one deal with one major to launch Sodastream into the stratosphere. It will happen.
There are 8 million and growing regular users of Sodastream. Those users are upper income, younger, health conscious trend setters. In another year there will be 10 million global users. What is the value of the installed base to Starbucks and others? Facts my friend. Facts. GMCR doesn't have an installed base for its cold machine. GMCR doesn't have a global footprint. GMCR won't offer customization. It will take GMCR 3-5 years just to build a decent base.
Sodastream keeps learning, growing, making better products. Sodastream has 50% plus margins prior to the state of the art manufacturing center coming on-line. Soda has put in over $100 million into it's new factory, money that will be recouped in 5 years given operational efficiencies. What are they going to do with that improved cash flow once that significant expense is done at the end of the year? Sodastream will be able to compete on every metric including price.
More efficiency, growing installed base, Harvard MBA CEO with tremendous drive and passion. Sodastream stock may be in a lull. Facts are that compound annual growth rate was 50% until last year. Last year they still grew revenues by 30%. Facts are Soda is still a disruptive business. Facts are Pepsi will work with Sodastream. They said so themselves. Facts my friends.
I believe that GMCR was the single best stock to own over the past decade. Massive 3000 plus % return. Great company. But that return was over a decade with plenty of down periods. So, those who got discouraged and left missed out. I wonder what percentage of GMCR investors captured all of that return? My bet, none but insiders. GMCR took time to build its base, add branded partners, learn from its mistakes and grow.
How many of you are willing to wait 5, 10, 20 years?
Au contraire mon frere! Pepsi CEO specifically stated she would work with all home soda makers! Also Starbucks CEO refused to deny a relationship with Soda when questioned by Jim Kramer. Schultz when questioned about Sodastream did not deny plans for Starbucks custom, handmade sodas to be available for home production. His response was "it's all about customization". Cusotmization is something only Sodastream can do. And these words aren't from me. These are what the CEOs of Fortune 500 companies said. So, you can either get on board while it is historically cheap (like I did when Apple was $400) or you can keep being behind the curve.
When the new plant is operational at the end of the year and they can step back from the plant in disputed territory. I expect Starbucks to take a stake and for Pepsi to make their syrups available.