Fevertree Drinks Share Discussion Threads

[villarich] 23/8/2018 10:12

That's fine Trev, I would expect anything else from you. You are incapable of having a proper debate. You also seem to be unable to grasp the basic concepts of how to value a fast growing share. That's fine though, not everyone can. Best stick to your blue chippers like VOD where you can read the accounts and hope for 2% cap growth a year

[123trev] 23/8/2018 09:47

So in a nut shell the p/e is far to high here and the peg ratio is about as good as a crystal ball because future growth is a total unknown,a guess done by those that are not really in a position to understand any future constraints the company might encounter.Villa I did read your post but as usual fell asleep 💤,lol.

[polaris] 23/8/2018 08:50

Hi DD,We each have our own timescales and it does indeed become progressively harder to predict the further into the future you go, the Crystal Ball effect. Growth companies are interesting from a purely academic point of view, as well as for making money. The LTBHs who have been here from much lower down have a distinct advantage of already multi-bagging. However, you still test your investment case regularly to make sure capital is efficiently allocated. Good luck to us all. Paul

[discodave4] 23/8/2018 08:28

ps so long as the percentage earnings growth is greater than the PE rating then I will be happy.

[discodave4] 23/8/2018 08:18

Morning Paul,Think we are both in agreement, as are other holders here, it's got ahead of itself short term, but I'm not interested in the short term, it's all noise, I'm more focussed on the long term - trouble is that's harder to forecast.I appreciate comparatives but will have to pull you up on what you did post previously, you were inferring that the H1 comparative growth of 45% was a sign that year end growth in excess of this, your assumed 66%, was very unlikely to be achieved - talking your book me thinks.Good luck, your short term hypothesis may well be correct.DD

[polaris] 22/8/2018 23:06

Hi DD,

Been traveling all day but picked up the post at the airport. The H1 comparator is exactly that - compares with same period in previous year. Clearly, H2 will be compared with H2 and the likely FY revenues are in the £250-255M range given similar growth performance, about £30M below the example i gave and about £9-10M below in profit projection.

Your numbers make sense to me and so the only point we 'might' disagree upon is when you get to the using a PE of 60 comment. I think this is where we all are guessing, how do you 'value' growth? what is the right metric? What is the right number? Why PE of 60? why not 80, 50, 45, 40 etc...? All imply a company with high growth prospects. The PEG does help here as as it is another metric to judge the growth against, BUT we are really all guessing, analysts included.

TBH i have no idea what the right number is to judge this on. Right now i am playing the short term voting game. I believe FEVR is overvalued in the short term on the information that is in the public domain - i.e. PE of mid 80s is too demanding for future growth uncertainties on a medium term timescale (3 years). I have the target that i think it should pull-back to. After that i will be out, assuming it is reached, and then re-evaluate at some further point in the future, as with all my positions. I'll go long and short based on trading patterns, fundamentals and charts. I may cut the position earlier than the original target, depending on new information to the public domain.

In many ways, this position is a punt to test a hypothesis. I'm a scientist and this is how we work. Look at a problem, define a hypothesis and then test it. I may be right, i may be partially right, i may be totally wrong, etc... define, test, learn, evolve, repeat.

regards,

Paul

[wetdream] 22/8/2018 18:32

ccr1958
Good news is built into the share price already.
The question is 'How much'?
Perhaps investors/speculators have decided that the co's push into the US may take more effort than previously anticipated and are reducing their holdings.
Haven't seen any significant reduction by the Major Shareholders, so a period of stabilisation at around £34 may prove a welcome pause before the next rise.
Who knows?
;-)

[ddubzy] 22/8/2018 15:55

Just added:"Given the strong performance in the first half of the year, the Board anticipates that the outcome for the full year will be comfortably ahead of its expectations"

[ccr1958] 22/8/2018 15:09

Good luck with the shorts boys 3m placed to instis at 3450

[sogoesit] 22/8/2018 11:22

My break-down level, on weekly, is 3275.
Then a ways to go after that.

[bamboo2] 22/8/2018 11:02

wet, agreed. Even more significant would be eod close below approx. 3350
This confirms another H&S with a lower tp of approx 3000-2950

Quite a bit of historical support below this level.
I very much doubt we will see a test of the Breakaway gap support zone 2222-2276

[wetdream] 22/8/2018 10:27

Short term it'll be significant imho if share price closes today sub £34.

[sogoesit] 22/8/2018 09:05

The issue here, as with all growth stocks, is how to value them, or more relevantly how the market will value them as they grow, decline in growth rate then go ex-growth.
As Villa consistently argues in his posts the (forward) PEG ratio gives a good comparator for judging where a stock may be undervalued or over-valued.

The argument is then about how much the market will pay for the future growth in EPS, if anything.
Just as there is P/E expansion, as I've shown in posts #3015 and #3017 for FEVR, there can, and will be P/E contraction at some future date. The numbers that indicate this will be the growth rates and margins.

For example, my 2018 revenue (£274m) and profit (£76.7m) figures differ from others here, being lower, but the valuation depends on the forward price paid.
Paying 50 x gives a projected share price of £33.
Paying 60 x gets you to £39.85.
The overall growth for these forecasts is 61%. The PEG ratio, therefore to me, gives a good measure of where the value may lie.

Anyway the 30-day rule date for my sale at the pop will be up soon and ready to re-invest!
Will the market be mis-pricing the growth before next results or will I be the wrong side of the market if I re-invest? That's all that matters.

[discodave4] 21/8/2018 23:06

Hi Polaris To hit your £283m rev at year end it only needs revenue growth:UK +80% (2017 was +97%) gives £158mUS +50% (2017 was +40%) gives £44mEurope +50% (2017 was +44%) gives £68mRoW +60% (2017 was +59%) gives £13mTotal revenue is your £283m (total +66%), margin 33% eps 64p, which is higher than my initial forecast of 55p (poss 60p). Using a PE of 60 that's a share price of 3840.Consensus forecasts are eps of 48p, but they always beat so don't see that your revenue £283m is unachievable (although IMO it is at the high end and could be more like £252m).Your using H1 as a comparator for the year but it's H2 weighted (Crimbo) so the 45% H1 rev growth is not a typical, grant you it is lower than previous (77%).No illusions here about its rating and the need to maintain growth, stating the obvious but until we know more nobody can predict what will happen so I will continue to hold until the story changes.DD

[123trev] 21/8/2018 22:46

I did explain the problem with using the peg ratio a couple of times I think look back you will find them.What figures do you want me to copy and post and what would be the point when we already no them! basicly I see this stock as extremely overvalued you don’t.Making assumptions on future profits and banding figures about is absolutely pointless because anything and everything can and does happen in business that effects future growth there’s the clue! Tiger happened to mention a couple of points earlier that have more relevance at this time ie possible capacity problems fulfilling orders and mounting competition.

[villarich] 21/8/2018 20:21

I don't believe you are here for a healthy debate. You've come out ona board that is full of bulls purely for attention and my memory of you coming onto the board is very different from your account. It started with you saying that the mcap was really high and no one should be invested. We all then started having a healthy debate about which metrics to use in order to value a company. We said PEG, you said that's no good and it should just be PE.A number of us also made it clear that we'd been invested for a long time and knew precisely what happens when growth starts to slow in high PE shares. To which you got all defensive and started spouting rubbish like, "I'll come back in a month and it will have tanked haha lol."You still haven't explained how PEG is the wrong measure to use to value a fast growing share, even though you state PE (a constituent of PEG) is. Far more successful investors than you or I would say you're wrong. If you can repeat figures all day long then why don't you? Instead of starting every post with Lol and accusing us of misleading others?

[skinny] 21/8/2018 18:25

Arguably moving to over sold now!! :-)

[villarich] 21/8/2018 17:30

Easy tiger, don't hold back now. You seem a little triggered. Not that it has anything to do with you love. I think you'll find my last post was assessed to Trev, not your good self. He seems to think I have influenced your decision to buy in to Fever Tree when clearly that's not the case. So I thank you for reinforcing my point with such fervour and wonderful language. We all know there's is only one influence in your life and that's your excel charts. Oh, and your random financial ratio generator you use to make your posts sound informative.I've never tried to give you advice, merely asked for your insight but you haven't answered a single question I've ever asked. As for your new best friend Trev, proving an opinion is one thing and I agree is allowed. But accusing someone of misleading another into parting with their money is an accusation of fraud. This can be deemed defamatory. Sorry if I haven't used enough expletives for you to understand this post.