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Wednesday, June 14, 2017

SodaStream (SODA) Climbs 6%, Should You Buy?

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Shares of SodaStream SODA jumped in Tuesday afternoon trading on the back of news that the home beverage system maker’s CEO bought a large amount of the company’s stock.

In a Securities and Exchange Commission filing reported today, SodaStream announced that its chief executive Daniel Birnbaumpurchased 20,000 shares of ordinary stock at an average price of $50.41 per share. According to the SEC filing, SodaStream’s CEO now owns 113420 shares of his company.

Since the filing became public, SodaStream’s stock price climbed 6.18% to $54.26 per share, which is roughly $3.50 below its 52-week high. Heading into today, the Israel-based company’s shares had risen over 36% year-to-date.

Current Outlook

SodaStream reported revenue and earnings beats in its May 10 first-quarter earnings report, and over the past month, the company has seen solid earnings estimate revision activity. On top of that, analysts have begun to turn slightly more bullish towards SodaStream’s short and long-term outlook.

The company is currently a Zacks Rank #2 (Buy) and it also scored an “A” for Growth and “B’s” for both Value and Momentum in our Zacks Style Score system.

Also, the “Consumer Products – Discretionary” space, which is the sector the firm operates in, is currently in the top 15% of our Zacks Industry Rank system, coming in at #40 out of more than 265 industries.

SodaStream could be positioned to capitalize on a new, more health-conscious beverage market, as much of the U.S. and the rest of the world becomes aware that sugary soft drinks might not be the best for one’s health, especially in large quantities.

U.S. soda drinks sales fell for the 12th straight year in 2016. According to trade publication Beverage Digest, per capita consumption of soda and soda-like drinks, including energy drinks, fell to their lowest levels since 1985—the first year it began tracking such statistics.

Another milestone in the transition away from sugary soda also occurred last year. Bottled water became the largest beverage category by volume in the country, surpassing carbonated soda drinks in the process.

The good news for SodaStream, despite its name, is that it makes less-caloric, less sugary sparkling and flavored water making devices and mixes—some of which contain zero calories, carbohydrates, or sugar.

As water continues to make its push past soda, the next big step in environmentally conscious societies will be to reduce the number of plastic water bottles sold. SodaStream already has this covered, as it allows users to make their drinks at home or at work in reusable packaging.

For consumers who don’t want to kick their soda habits just yet, SodaStream offers a variety of soda mixing options with 2/3 less sugar than most canned sodas. These soda options also don’t use high-fructose corn syrup or aspartame.

Conclusion

SodaStream’s CEO seems to have a new sense of optimism in his company, and our Zacks Rank and Style Scores suggest that SodaStream is currently positioned well. However, what may be more interesting to potential investors is the fact that the massive consumer beverage market is deep into a paradigm shift away from soda. That potential may speak to some investors!

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SodaStream International Ltd. (SODA): Free Stock Analysis Report
 
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Zacks Investment Research

June 14, 2017 at 02:33AM

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from Benjamin Rains

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