Fevertree Drinks Share Discussion Threads

[apad] 12/6/2017 10:56

I remove the offer signs from Fentimens!
apad

[villarich] 12/6/2017 10:36

Completely agree Christh. Every time I'm in a supermarket I make a point of checking the mixer shelves and rarely are Fevertree fully stocked.

[christh] 12/6/2017 10:13

Villarich,
that proves that is ever so popular and the demand is high.

So you know you are in a quality stock!

[ccr1958] 12/6/2017 08:39

Thx for the little shake ,I have doubled my holding this am :)

[christh] 12/6/2017 08:35

Heavily oversold.
I do expect a bounce to £17.30

[sogoesit] 11/6/2017 21:37

Reading apad's reference when you see the competition I would be pessimistic about Fever Tree's chances of competing!
However, it does and does it well. Maybe there's some other secret we haven't latched onto here?
Maybe Americans' taste buds are different from Brits'? They certainly are for chocolate where chocolate producers, e.g. KitKat, make a different taste chocolate for consumers in Britain, Europe, the Far East and America etc.

Whatever, the proof of the tonic is in the numbers!

[bamboo2] 11/6/2017 17:22

A few mentions here,

hxxps://www.tripadvisor.co.uk/

search USA, Fevertree

edit, link too long

[apad] 11/6/2017 13:52

The yoodle market is quite busy!

portlandfoodanddrink.com/best-tonic-water-gourmet/

apad

[ccr1958] 11/6/2017 12:39

I travel to the States quite a bit ,I will report back !

[devalpha] 11/6/2017 09:42

I echo the comments of posters here who are questioning why the consensus forecasts for 2017 show a massive deceleration in sales growth.None of us has a crystal ball, but we all make investment decisions based on our experience, insight and future expectations. My view is that the consensus forecasts are way too low. In the UK you can clearly see momentum continuing to build on the base of the strengthening brand awareness. The big unknown is the non uk current growth picture. This is what will ultimately determine how much further the share price has to go. We all make our own choices. For me, after taking all current info into consideration, including the valuation, I'm going nowhere. Courage required here in my opinion.

[henchard] 10/6/2017 19:19

Interesting stuff Sogoesit and APAD. I will await the H1 results to see whether revenue, margins and earnings support the idea that the City (and house broker) are wrong in forecasting such a marked fall-off in the rate of FEVR's growth.

[sogoesit] 10/6/2017 17:37

I'm afraid not apad, I do most of my research experience in hotels, bars and supermarkets!
And I travel far-eastwards, seldom to the US.
Dark spirits will be a mystery to me I'm afraid although I drink the Ginger Ale as I like ginger tastes, in cooking as well.

Yes, my portfolio had also got to 20% Fevr a few months ago but, with other stocks temporarily outperforming, it has dropped back to 13%.
I leave things to re-balance themselves in the short term and don't worry. The other way I look at it is to compare the capital investment (exposure) as the portfolio balance... thereby not being swayed by the profit element.

[apad] 10/6/2017 17:31

ps
My holding is about 20% of the portfolio and it is a worrying level.

[apad] 10/6/2017 17:30

S, it seems to me that the only way to monitor FEVR's success or failure in the future is to monitor its penetration into the US market. This implies trade journals, not share journals. Do you have any notion of how to do this?
apad

[sogoesit] 10/6/2017 17:25

Indeed, apad, you are right. I said that that was where the IP (Intellectual Property) value resides. Without the fundamental taste ingredient or difference there would be no (tangible) value!
The matrix of differentiation has many axes to it.

[apad] 10/6/2017 17:20

Agreed on the need to differentiate and advertise - create status.
Fentimens has been around for a long time, without FEVR's success

My point is that the taste issue is real.

We did a blind tasting and people were not much bothered by the brand of gin, but nearly everyone rejected the Schweppes tonic.

apad

[sogoesit] 10/6/2017 17:15

Yes, there's an argument that physical taste is the main differentiator here and a differentiator none-the-less.
If they had just believed in the taste issue they could've just gone with competing on price with Schhh. But there appears to me to have been a conscious decision to "premiumise" and charge for that in their marketing strategy.

I've discussed the notion of quinine "addiction" with a friend from Africa who stopped drinking G&T once the quinine had disappeared.
However, "taste" is also a matter of style, if there is disposable income.... Why do they emboss their bottles?
Fascinating!

[apad] 10/6/2017 17:09

"Essentially it is an IP Luxury "Brand" company like Burberry or Chanel, if you like, where the IP is the flavour ingredient. The major expense, or incremental expense/investment, is in marketing; now into overseas markets and "dark spirits".
This is a classic business case of a differentiation strategy and destabilisation of an existing market."

That's a style argument.
I met an old friend in a supermarket with a load of Fever-Tree tonic and she was talking about the taste, not the style.

I bought FEVR shares when my wife and a friend were paying more for the tonic than the gin in an hotel. Mind you that same hotel is now selling Fentimens!

apad

[sogoesit] 10/6/2017 17:03

True... hence the "differentiation strategy".
Yes, there is no allusion in the sales make-up of who drinks these "mixers" without alcohol.
I buy Madagascan Cola and drink it with lime. I don't buy or drink Coke or Pepsi.

[apad] 10/6/2017 17:01

.....except that folks have found that the reason they were flooding gin and tonic with ice and lemon was to take away the taste of aspartamine.
Madagascan cola is drinkable.
In other words, it's not just another style of handbag, the market dominators had left a real space in the market by reducing the quality of their product.
apad

[henchard] 10/6/2017 15:05

From a little more optimistic angle:

Looking through my notes, I see that this time last year the consensus EPS forecast for 2016 was 16.5p. FEVR ended up doing 23.86p, so exceeded expectations by near to 45%.

A repeat of that level of beat this year would see the current consensus of 27.68p turn out at around 40p. That would give a P/E of 43, year-on-year EPS growth of 67% and an attractive PEG of 0.64.

I still don't really understand why analysts are forecasting such a marked deceleration of EPS growth this year. Revenue growth slowing somewhat is one part of the equation but it also looks like there's an expectation of a lower pre-tax profit margin this year than last.

Has anyone seen a broker note? Or know if FEVR is planning to hike capex, marketing spend or any other costs that might account for the forecast slow-down in bottom-line growth?

[henchard] 10/6/2017 13:48

DiscoDave4

"growth is definitely not going to have gone from 106% to 16%."

I do find it very hard to see why the consensus is for growth to decelerate that much in 2017. Even the most bullish analyst has growth moderating markedly to 22.5%.

I'm expecting FEVR to beat forecasts but, as you say, by how much is the big question. As we're getting on for halfway through the year and forecasts have already been upgraded since the AGM statement, I don't think there's a high likelihood of a huge beat to 35.4p or more. Just my view of course. The market seems to disagree with me and to be pricing the stock to deliver forecast-walloping results.