Well, we are in the 5th wave here according to the charts, and almost always upon completion of the 5th wave there is a pullback, but how much who knows.
To those in the Capital Ladder base. If you want a copy, let me know. While you may not agree with DB's recommendation, it may prove beneficial to know the why behind the recommendation. goldenseth@ymaildotcom
Problem that most people overlook is refilling stations are a necessity, that is the second layer to the distribution problem of CO2 building for any, any other company. Permits for CO2 refilling stations of mass scale are extremely hard to come by, then there is the logistical servicing issue and on and on and on. KISS it and go with SodaStream.
Again hilo, you are not accepting the reality which is that a machine can't operate without CO2. It doesn't matter who comes out with a machine, they will need to have CO2 to power the machine and a distribution network to perform the exchange. This is why SodaStream's first mover advantage and monopoly of the exchange market is such a high barrier to entry. Coke wants to sell a machine, good fine, they are going to need to be powered by SodaStream and that means SodaStream sells even more gas at roughly 90% gross margin.
It has little to do with machines and much more to do with CO2 distribution and exchange. That is the biggest barrier to entry.
We initiated coverage in summer 2011 I believe, with a Buy recommendation and $53 PT which was reduced to $50 in 2012.
The NFA and SEC offer firms a great deal of leeway with regards to ratings, but not price targets as moving price targets can result in influencing stock price movement as evidenced by today's price action. There are strict time constraints and criteria that the SEC outlines which warrant/allow firms to change PTs. So while I'm not prepared to change our PT even if it settles out higher than $64 a share we may be inclined to change our rating recommendation. Please don't take this as an indication that I'm considering this measure at this time as our ratings usually hold firm in spite of PT achievement for some time. Oh and yes, the current recommendation is Buy.
We raised our PT to $64 at 8:00 this morning. We had many discussions yesterday with investors and other analysts. I hope you all read our summary of yesterday's event as it will be expanded upon to include forward looking analysis in the coming days. It's not such much what was said, its the conversations that you didn't hear off stage and during intermissions. You heard about HEB, Kroger, Office Depot and Alco, but there are some that weren't mentioned and I hope you heard my question about Canada and understand why I posed this question. Nice job longs and much luck to you over the coming months.
They beat analysts estimates handily and by a huge margin. The company benefited from a 500+ point margin improvement; lower green coffee costs, favorable product mix shift and lower warranty claims. Here's the problem you don't want though: They missed sales by a wide margin and they guided sales below their own FY13 forecast. Earnings per share benefited from fewer shares in the float due to the buyback plan as well. The company can only masks poor sales for so long, just like MNST which really missed the bar, and again, during quarter. And a buyback plan can't save you if youre GMCR for too long, again, just look at MNST which has had a buyback plan for several years now. The bottom line is sales have to be there and for GMCR, they are showing signs of deteriorating sales strength in a very competitive market category. I haven't had a position in GMCR since early in Q2 and did quite well. I will be instituting a new position in the near term.
25%. First, it's SODA's first Analyst Day, second, most of the analyst covering SODA are new or 2nd Tier analysts, don't know what questions to ask, what is most relevant and far reaching. Take for example the analyst whom asked why the sequential drop in machine sales on the conference call. It was as if the analyst had no clue of the trend from Q4 holiday sales to Q1 normalization of sales. Don't mean that disrespectfully, but it was not a highlight for that particular analysts' career and I'm sure the other analysts had a good laugh at his expense.
We initially had no intention to attend the event as we have been invited to be the first firm to visit Israel and the new manufacturing plant. We simply didn't feel there was anything to gain by attending the Analyst Day. However, and more to the point of your question, there are some unaddressed questions and insights that we would like the company to speak more freely about and as such we intend to force the issue at the event. Capital Ladder is aware of some partnerships that we would like the company to bring to the forefront because we know the deals are done, akin to us knowing about the Wal-Mart deal ahead of the actual announcement. (Don't ask what those deals are and for those who have the report, maintain low tones lol) Unfortunately the other analysts are unaware of the deals and thus wouldn't have this line of Q&A on their respective plate. So we do intend to press some of these issues amongst others. Lastly, it is always good to hear other perspectives in case you find yourself to close to the story. Tunnel vision doesn't work for analysts, so if someone has an additional point of interest that we have yet to explore, its worth the experience.
GMCR is all over the map the last 18 months, terrible management but a new CEO in place. Comps are tough, but product launches may serve to offset POS performance for machine units. It really comes down to management and the team delivering on promises made in Q4 2012 when they said they would make improvements to capacity utilization and bring in-line production costs with demand forecasts. If they successfully achieved this goal, all should be fine. They will see margin benefit from lower green coffee prices and possibly warranty reduction costs, but this may be offset by k-cup product mix shift, won't know until they report. I'm hopeful obviously, but have no position given the stock price. With a stock that has been on a rollercoaster and already achieved our PT, we tend to stay on the sidelines until a defined trend is in place. There has yet to be a long term trend in place but if they manage another successful quarter, we may be inclined to take a position. SODA will likely follow GMCR's price path AH as it has in the past. Would love to see that change for the positive though. Good luck and be well!
Will be traveling Sunday to attend the Monday meeting. Obviously this is a good opportunity to address management directly and gain additional insights regarding recent and future developments. If you have questions you would like us to consider for the meeting and our one-on-one time with management, please feel free to fire away. Pertinent questions obviously, nothing from the peanut gallery kindly!
Japan weakness easily explained and just as easily rectified in coming quarters. Gross margins higher than initial guidance. Consumption rates increasing in key markets. Best Buy officially rolled out gas exchange nationwide yesterday. Existing door sales up roughly 30%. Taking on long term debt at low interest rates, smart play. Unaided brand awareness up. Sell me more shares kindly!