Fevertree Drinks Share Discussion Threads

[dround87] 17/1/2020 10:34

Well thanks everyone for some useful input. I think people are writing off the UK market far too quickly though. At 35pc market share of the mixer market there is still a lot to play for in what is still fevers main market. At 30pc growth it'll take the US 4 more years to take that crown. UK is important and will have the biggest impact on fevers numbers for some time yet.

[sogoesit] 17/1/2020 09:58

Thanks Apad.
Missed the hiring stuff. I think it was you, or llama (?), who used to give hiring info from linked-in but haven't seen anything recently.

[apad] 17/1/2020 09:23

Two additional posts on offer (during the last month or so) over the 35 starting positions. Sogoesit. Assuming they haven't lost anyone.

They set up the US very sensibly by hiring an experienced drinks industry manager who hired young workaholics from existing drinks industry companies and started with the Glazers contract. The only UK person was an accountant who moved out there (their spy in the camp 😊)

So, they didn't make the mistake of running a US company from the UK, but set up a company with an american culture.

apad

[sogoesit] 17/1/2020 09:04

Good to hear llama. Sounds encouraging.

[llama1978] 17/1/2020 09:00

There’s quite a few signs that Fever is doing pretty well in parts of the US. I doubt it will ever crack Alabama but let’s say the decent parts of easy and west coast are up for grabs. The Americans I know love the ginger beer. Fever had a big setup in New York Bryant square over Xmas. Gin sales are also growing in the US so it’s not just a dark spirit market.

[sogoesit] 17/1/2020 08:59

From a trading, or initiating, point of view I would pick 1900 if we were speculating on a bottom (called at 1700) but longer term would like to see a confirmation... double bottom or reversal of trend.
On the fundamentals side I’m not yet convinced as discussed above.

[sogoesit] 17/1/2020 08:54

What about the USA? Any signs there?

The issue is that management are targeting the US for its further growth leg while the UK has gone (relatively for FEVR) ex-growth. I, along with the market I suspect, is focused on this performance.
The performance in the US will bear on two issues growth and credibility (given that the US is particularly difficult for UK retailers to crack and that it is not a “gin market”).
Management admit to the US being a “dark spirits” market with a vaunted ten times market capacity to UK gin. This raised expectations significantly in a few folks minds. Will they live up to the expectation and, if they do, how long will it take?

[sogoesit] 17/1/2020 08:32

You’re welcome and glad to be of service ;-).
Nothing wrong with small test “positionsR21; but where are the market observations for the most impactful strategic market currently for FEVR (the USA), macro or micro?
This info, is what fundamentalists are waiting for.
(Historically, as with previous growth, if it were good, management would be issuing “expectation” RNSs as they did when the original U.K. growth was so good).
By the way, I’m not a (short term) “trader” in this stock.

[dround87] 17/1/2020 07:37

I'll take (i) on the chin but I don't see any evidence of (ii). In any case you misunderstand. I'm not a chart trader. I was simply attempting to gain a safe foothold ahead of the trading update next week and what I think might be a better year for fever based on market observations. As a result I lost some pocket change. But thank you for your concern!

[sogoesit] 17/1/2020 06:47

The folks on the other thread, trading long, are committing the ultimate traders’ sins (i) trading against a confirmed trend and (ii) calling a bottom in that trend without confirmation of a change in trend (no crossovers of any significant MAs).
No wonder they’re struggling!

[dround87] 16/1/2020 22:32

Don't worry. I can summarise that for you - Good margins.

[christh] 16/1/2020 21:46

Why Fevertree Drinks Plc’s (LON:FEVR) Return On Capital Employed Is Impressive
Simply Wall St
Simply Wall St.•8 January 2020

Today we are going to look at Fevertree Drinks Plc (LON:FEVR) to see whether it might be an attractive investment prospect. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.

First of all, we'll work out how to calculate ROCE. Next, we'll compare it to others in its industry. Then we'll determine how its current liabilities are affecting its ROCE.
Return On Capital Employed (ROCE): What is it?
ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. Overall, it is a valuable metric that has its flaws. Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.
So, How Do We Calculate ROCE?
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Fevertree Drinks:
0.38 = UK£78m ÷ (UK£239m - UK£37m) (Based on the trailing twelve months to June 2019.)
So, Fevertree Drinks has an ROCE of 38%.
Check out our latest analysis for Fevertree Drinks
Does Fevertree Drinks Have A Good ROCE?
When making comparisons between similar businesses, investors may find ROCE useful. Fevertree Drinks's ROCE appears to be substantially greater than the 15% average in the Beverage industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Regardless of the industry comparison, in absolute terms, Fevertree Drinks's ROCE currently appears to be excellent.
Our data shows that Fevertree Drinks currently has an ROCE of 38%, compared to its ROCE of 28% 3 years ago. This makes us think the business might be improving. You can click on the image below to see (in greater detail) how Fevertree Drinks's past growth compares to other companies.

AIM:FEVR Past Revenue and Net Income, January 8th 2020
Remember that this metric is backwards looking - it shows what has happened in the past, and does not accurately predict the future. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. Future performance is what matters, and you can see analyst predictions in our free report on analyst forecasts for the company.
How Fevertree Drinks's Current Liabilities Impact Its ROCE
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
Fevertree Drinks has total liabilities of UK£37m and total assets of UK£239m. As a result, its current liabilities are equal to approximately 15% of its total assets. A minimal amount of current liabilities limits the impact on ROCE.

What We Can Learn From Fevertree Drinks's ROCE
Low current liabilities and high ROCE is a good combination, making Fevertree Drinks look quite interesting. There might be better investments than Fevertree Drinks out there, but you will have to work hard to find them . These promising businesses with rapidly growing earnings might be right up your alley.
I will like Fevertree Drinks better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
The key operational fact about Fevertree is that it sub-contracts the bottling in each important market ( UK, Canada & USA, for example).
Apart from improving ROCE, this also removes a considerable amount of currency risk, and allows management to concentrate on marketing, and product development.

[bulltradept] 16/1/2020 19:56

dround87,

It is volatile that's for sure, the story's not over yet me think if there is any hint of a stall in the story we may visit those gaps quicker than the draws going down like a lady of the night.

[trying2getrichquick] 16/1/2020 19:42

Interesting other share today - Emmerson which was up 12.5% at one point today. Only 4p a share with huge potential gains within 6 months to a year. Watch the news story from the CEO -

[dround87] 16/1/2020 17:11

Hmm. Big engulfing candle. Seen this go both ways. Such an unpredictable share! The institutions play PIs like a fiddle on this. That's the problem when the multiple is so high. Sentiment takes over and you may as well be trading crypto. The price is completely disconnected from the value of the company. No one can say for certain where Fever will be in even 2 years time. Check the chart towards the end of November though for a positive example where an engulfing candle was reversed. The following day opened at a level that would have sent me running for the hills but it rallied fast and hard ending the day on a huge positive. If I remember correctly a ballsy trader could have taken 20pc that day alone. Rather you than me holding through that! If I see it crash tommorow morning then I'll put a limit buy order in at the same sort of level I sold today and await results. Otherwise I'm keeping a safe distance until I have more info. Very unusual situation in the UK this year. Some huge winners anf losers. Perfectly feasible at this point that fever could be a winner.

[bulltradept] 16/1/2020 16:51

Looks like Mr Market will make us wait a little longer, be interesting to see if there's much movement in this tomorrow.

[dround87] 16/1/2020 16:38

Best of luck

[dround87] 16/1/2020 15:56

Yeah well you know me! Tbh I'm more optimistic than I was but my personal policy is to treat over popular shares that attract high multiples with extreme caution. Expecting a rally and agreeing with the valuation are different things.

[bargainbob] 16/1/2020 15:40

We all knew you would change with the wind lol

Back to doom and gloom retail reports tomorrow dground .

[dround87] 16/1/2020 15:22

Gone at 1985. Worth a punt. Back to my usual bearish self and no longer best buds with Chris.

[bulltradept] 16/1/2020 14:30

Perhaps the cavalry will arrive soon?

[dround87] 16/1/2020 14:20

Skin of my teeth. Not moving off 1990 though. Break even or go home.

[bulltradept] 16/1/2020 14:18

dround87,

So you are in still then?

Today's fun and games was only to be expected given the strong rise in the previous days. Still all to play for.