Member Info for Surreyman

The best of luck.

The analysts who forecast £40 plus must be out of a job now.

At the moment the largest investors seem to be holding on, and as yet no signs of them adopting your "filling their boots" tactic.

Not looking good, shorters at work or suspicion that UK sales are in decline?

Deals with performance since flotation and suggests a bid might emerge at current levels, who from is the question.
Quotes:-
Of the eight brokers covering Fever-Tree, six have stuck with their “buy” recommendations. The other two have “hold”. None are telling their clients to sell.
The company has now targeted US supermarkets. Fever-Tree now can be found in around 3,000 Walmarts, more than 750 Krogers outlets and 600 Safeway stores. These deals have been harder to seal, however, and big grocers only began stocking Fever-Tree mixers in recent months, leaving room for growth in the rest of the year.
“It’s very clear that there is going to be an acceleration during the second half.” (In the US)

Despite potential competition concerns, Mundy reckons Coca-Cola, which owns Schweppes in the UK, could be a good fit. “Under Coca-Cola’s ownership, there would be faster global expansion of the brand, with the Fever-Tree portfolio being franchised to bottlers.”

Rumours have also circulated that a spirits giant such as Diageo could generate significant cost-savings by absorbing Fever-Tree. Ivan Menezes, the chief executive, rules out such a notion though. “It’s not a good fit for us. We don’t see getting into the mixers business,” he says.

Aberdeen Standard’s Cooper, who controls a near-£200m stake in Fever-Tree, is wary of an opportunists. “I think that is something that we should be aware of. There are other companies that are wanting to get exposure to this attractive market.”

Despite Fever-Tree’s recent rollercoaster ride, the overwhelming majority of the City remains bullish about Rolls and Warrillow’s plans for global supremacy. Many even think it is now undervalued and remains ripe for a takeover approach.

“At this level it’s got to be vulnerable,” says Hammond “For what it’s worth, I think PepsiCo is the most likely [bidder].”

Sceptics question how a company that makes only £76m of pre-tax profit could possibly attract a multibillion-pound price tag. Fever-Tree is little more than flavoured fizzy water and fashionable marketing, they argue. “Entering the soft drinks or premium mixer category isn’t that difficult – but building brands at scale is,” says Nielsen’s Laszlo Zsom

Full article only available online via the Telegraph's Premium subscription
https://www.telegraph.co.uk/business/2019/07/27/fever-tree-looks-us-growth-15bn-wiped-value-shares/

Many analysts are wet behind the ears graduates who pump up their business experience, if any, via lengthy CVs that amount to the square root of zero. Any decision to buy or sell shares should never be based on brokers' analysts' reports.

On 12 June " HSBC INITIATES FEVERTREE DRINKS WITH 'BUY' - TARGET 3400 PENCE"

Methinks some way to go to achieve that target if sales are indeed tailing off.

Fever-Tree is entering the RTD market with three pre-mixed Gin & Tonics in 27.5cl bottles.

The range includes a Premium Indian Gin & Tonic; a Refreshingly Light Gin & Tonic; and an Elderflower Gin & Tonic. These will be available from Tesco stores from May 20, priced at £2.75 per bottle.

Fever-Tree’s innovation team worked closely with Charles Maxwell of Thames Distillers to craft its own unique small batch premium gins, which were chosen to perfectly complement each tonic water.

A juniper-forward London Dry Gin was chosen for the Indian and Refreshingly Light Gin & Tonics while a lightly floral gin has been used for the Elderflower Gin & Tonic, to give it a delicate aroma.

To be sold by Tesco stores.

http://www.drinksretailingnews.co.uk/news/fullstory.php/aid/18706/Fever-Tree_takes_its_tonic_expertise_into_alcohol_with_launch_of_RTD_trio.html

Fevertree: Berenberg today reiterates buy with a target price of 3,900p.

Well at least they are still optimistic about prospects.

A bid for the company may be made of course, Unilever was suggested in that connection some while ago, and one could speculate on the emergence of other potential bidders and add Diageo. I would be surprised to see any offer above £30.

Fevertree could also develop other products to expand their potential.

Article by Tom Stevenson of Fidelity International on Fevertree in today's Daily Telegraph Business Section.

In a nutshell, a £40 share price will be a long time coming again, as he says the company is going to need more than an exciting story. He takes the view that the UK and EU market for the company's products is reaching it's peak, as quote "There is a limit to how much gin even we can put away short of a return of the days of Hogarth."

To which I would add the comment that even the poor drank neat Gin in those far off mid-18th century days, with no added Tonic!

Hogarth's "Gin Lane" https://www.theguardian.com/artanddesign/picture/2012/sep/12/william-hogarth-gin-lane

Stevenson is not optimistic the US market will yield substantial growth to drive the share price up, and the current yield on shares is less than the UK's rock-bottom base rate.

The article is only available on the Internet via a DT Premium subscription.

I think for the rest of this year and next the share price range could between £22 to £28, only time will tell.

Must be due to our local Supermarket beginning to sell Fevertree bottles of tonic and packs at long last, with empty spaces on the allocated shelves.

The Christmas packs of mini-bottles of a selection of Gins plus mini-bottles of Fevertree tonics stacked up last week in an aisle none around by this Wednesday morning.

Be of good cheer

Trendz says

".....there is a strong whiff of serious UK retail woes ahead."

It is already here from what I gather from our local supermarkets' till cashiers, the Fevertree brand is not flying off the shelves, too expensive and I live in an affluent high net worth area. Morrison's sells it's own brand diet tonic water with lemon for 44p a litre so a smaller bottle of Fevertree tonic looks somewhat expensive at £1.85.

Morrison's sometimes reduces some Fevertree tonics to £1.35 a bottle probably to shift the stock.

Sales may pick up over Christmas and the New Year.

I read the Drax coal power station has started it's carbon capture trial, 1 tonne of Co2 a day scheduled to be produced.

Drax said the CO2 will initially be stored on site but eventually it will seek to find a use for the gas, such as in the drinks industry which earlier this year was hit with a CO2 shortage.

https://www.bbc.co.uk/news/uk-england-york-north-yorkshire-46342886

The end is not yet nigh!

https://www.bbc.co.uk/news/business-45912910

You don't quote your source for this information!

Rolls sold his latest tranche of shares at over £34, he must be quite pleased he chose the right time. I wonder whether the Institutional shareholders are still as keen as they were on acquiring more shares, time will tell.

It would be a good idea if the Berenberg optimists giving a target price of £42.50 in their latest note, gave an opinion on the current state of play!

Shorters may be at work on the shares judging by the fall over the last few days. Existing Institutional shareholders might come in sub-£28, that was the level that some thought might attract a bidder.

My first buy of Croda was at £5.34 in January 2009, I sold at £8.93 13 months later, since then I have bought and then sold Croda at a modest profit on three occasions. Had I stuck to my original Croda holding in the last 9 years my investment would have appreciated ten fold. Just illustrates that ducking in and out of a share does not pay off.
My latest Croda buy was at just under £45, I don't intend to sell again.

In the case of Croda I forgot Warren Buffett's advice "When you find good stocks, buy them at low prices and hold them."

Fall back to under £30 would not be amiss, some buyers were getting far too excited about future sales growth.

I staying on the sidelines at the moment, as ever I may be right or wrong to do so.

The pessimist's view on Fevertree shares, Fund Manager Barry Norris of Argonaut, closed his short position on the shares a few months ago at the same level as he put it on, but seemingly still has reservations about delivery on future projected sales growth.

http://citywire.co.uk/money/small-cap-managers-toast-fever-tree-as-shares-soar/a1140731?ref=related-news

Trading update tomorrow, I think the price highs recently have been running well ahead of tangible results from the US, a heady PE of over 90 indicates that. It may be a year before we see any meaningful sales expansion there. I took my profits at just under £34, my investment strategy motto is "Never get too greedy".

You can always buy again on a significant dip in price. I sold all my shares in Fevertree in the last minutes of trading yesterday afternoon. I believe the share price is running well ahead of news of tangible results.