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They don't really have any significant competition in the UK at least, I think the brand strength is a pretty significant moat. A few years ago Schweppes tried launching a premium version of their product which seems to have utterly failed (not even stocked in waitrose any more. Is there many other strong mixer brands in the USA market?
I think it is a good, well developed brand ....so competition would be better buying them than starting to compete and the last thing you want with a Premium brand is a price war .........the market is big enough for other brands like Schweppes.etc ...no one will ever take the whole market ...need to have something strong to want to compete and put in the marketing money against existing main players
My main concern here is competition. They have created a great thing, but there are better ones out there and their are not really any ' moats' to thwart any competitive challengers.
Seeing as now is one of the big trade years, shorts closing position, and floor formed, the upside is massive
I personally think sales will be good for the summer.....question is what happens after that...and how much margin have they managed to retain from the good summer revenues?
" Moet Hennessy CEO Philippe Schaus told CNBC demand in Europe is “on fire” thanks in part to the return of European tourism."
https://www.cnbc.com/2022/06/29/lvmh-buys-california-wine-giant-joseph-phelps-as-high-end-drinks-market-soars.html
BlackRock single handedly shorting this stock!
https://www.shorttracker.co.uk/company/GB00BRJ9BJ26/
Greenvale Capital have closed their entire position down from 2.65% short to 0% in a week.
BlackRock now increased to 4.21% - who would go up against the worlds largest asset manager?
I will not be buying these until we reach £6 -£5. The P/E ratio is far too high. Good product........but too expensive already...... and little chance of increasing the already over inflated price of the product!
My bad, you are correct about Nick Train buying in around the £19 mark.
It's a pretty large short position on Fever Tree now, especially BlackRock at 3.91% of the shares.
I've had Fever Tree on watch for ages. "UK now in inflation environment" does mean this downtrend could continue a lot until reasonable PE and Yield has been achieved. That's not great for any current holder or buyer at today levels to think about, but I imagine many of us have shares in good companies stuck in lows.
Greenvale Capital LLP 0.87 -0.84% 28 Jun 2022
CapeView Capital LLP 0.52 -0.10% 24 Jun 2022
Millennium International Management LP 0.50 -0.08% 17 Jun 2022
BlackRock Investment Management (UK) Limited 3.91 1.80% 14 Jun 2022
Total 5.80%
Actually Nick Train loaded up on this at around £19-20 as recently as January. Wonder what he is thinking now. Personally I'm still happy holding this for the long term but it probably won't well in the current recession.
Re margins.
I think every company is feeling the heat on this one. But fevertree does have a rather large one which puts it in better position. I just think short term that the efficiency of the new production lines might not be where they need to be which creates a buying opportunity…
When you look at the markets they seem to be around fair value but that’s based upon previous earnings. However I expect a pretty steep reduction in demand being reported going forward.
Makes sense. It’s the logical progression. Some of the other big drinks players have bought out premium brands. By all accounts consumers don’t like them as much but this is surely going to have some effect on sales. Nick Train loaded up recently around the £15 mark.
Definitely one for the watchlist and will be buying around the £9 mark
the market is betting earning guidance wont be met..by the looks of it ...
" It has been taking action to reduce the impact by ramping up local production on the east coast of America, alongside a fully-functioning west coast production line, to help reduce high shipping costs" ...although storage costs, US driver shortages and cost pressures were mentioned
revenues may have held up...but the question is all about margins which like everywhere look threatened
Yolodn,
i think they have developed stand alone flavours ...drink on their own nothing else added but ice ...quite refreshing and tasty for.. say..lunch drink without alcohol
" but does tonic really make that much of a difference to a G&T?"
err yes sir....surprising so...although it depends how much Gin you put in :-)
Diageo has a much wider moat and brands for that matter. Fever tree is “just” tonic. Agreed, alot of consumers prefer it over other brands (just check the online reviews for the supermarkets) but does tonic really make that much of a difference to a G&T?
Hope so! Under £9 a share is a decent price to tuck away for a few years and see what happens. From my back of an envelope calculations I value the share at around £10 with 15% growth baked in.
Sterling really is a **** show at the minute isn’t it. Should have loaded up on USD when it was $1.30 to the £.
This fall is pretty crazy - 15% in two days is ridiculous! Diageo has only fallen 5% in the same time.
That article you have posted is probably spot on re spending and most of this stuff now back to covid lows or worse which seems bizarre as the world was shut down at that point. Markets seem to be pricing a hardcore recession, sterling is getting destroyed ( as usual since brexit ) and property market looks like next to crater even with still too low rates, so I guess expensive tonic not top of the buy list. Got a horrid feeling this will see under 9.
Pokerchips
I now think of shares like
Snakes and ladders
Today a viper got us!
Hopefully one day we'll go up the ladder to the roof!
niklol
all I know is that I am just a tiny fish in a big ocean and that the algorithms just move on the slightest nudge from all sorts of data ..... it isnt really watched by some guys buying and selling..it is now the algos just reacting to data from day to day....and now its all volatile ...data can read one thing one day and suggest the slightest change the next ....
data from shipping container movements to truck rental rates to jobless figures to..well you name it...
we are beyond keeping on top of it all
Pokerchips, in reply to your comment, I do not know what to take notice of anymore in respect of shares movements ??
Sharecast news on hl quoted; four weeks to June 18th, sales of beer , wine and spirits fell 9.7%. Source; nielsenIQ.