FIZZ - National Beverage Corp

[mwtorock]

Does anyone have a recent short thesis on this?

Just to list out what i heard or read and we can add and discuss:
1) growth is maxed out already in terms distribution based on what management has done. there is no international growth at all under this management

2) competition from PEP - Bubly is taking share and will continue to do so along with private labels as consumers do not have preference in this category. They are picking whatever is cheap or hot in terms of promotions.

3) Nick controls the company and he is weird. No big companies would want to deal with him for either a buyout or partnership. So there is no way to unlock the value.

[Gregmal]

Dont know the new short thesis. Dont really think there is one outside of the new conditions persisting/worsening.

I did find it interesting that for the first time in years, I did not see this at Costco anymore. At least not the one by me.

[Gregmal]

https://twitter.com/MarioGabelli/status/1168209149483728896

Been debating buying a few $35 calls. Stock seems to have some support around the $40 mark.

[Spekulatius]

https://twitter.com/MarioGabelli/status/1168209149483728896

Been debating buying a few $35 calls. Stock seems to have some support around the $40 mark.

They should try to sell a version with some booze in it, it may just work.

[Gregmal]

https://twitter.com/MarioGabelli/status/1168209149483728896

Been debating buying a few $35 calls. Stock seems to have some support around the $40 mark.

They should try to sell a version with some booze in it, it may just work.

I've long hoped(despite not having a position yet) that they'd try this. It would certainly help correct the ridiculous nonsense and slander this company has had to put up with. It should tell you something when people describe White Claw, overwhelmingly regarded as the best spiked seltzer, as "basically La Croix with booz"....And yet, Capporella hasn't acted.

[Gregmal]

https://www.businesswire.com/news/home/20190905006004/en/

This continues to be one of the most bizarre companies I've ever followed

"Highlights First Quarter

LaCroix’s 13 market bus tour and sampling experiences garnered over 25 million in impressions this summer (actual 25,192,955 source Vector Media).
LaCroix Hi-Biscus Social Campaign reached influencers representing over 187 million impressions on Instagram (actual 187,206,444 source Instagram).
LaCroix Pamplemousse has reached iconic status with numerous placements in the media including several appearances on the Tonight Show featuring Jimmy Fallon. The entire LaCroix line up is now led by Pamplemousse."


These are highlights?

[SHDL]

This continues to be one of the most bizarre companies I've ever followed

I have come to regard that as part of the fun.  Gotta love how the announcement starts by highlighting how they sold more soda as we went from spring to summer.  Hopefully they keep that trend going.   

Jokes aside, the valuation does look like it’s at a level where we can expect very good upside if they start growing again, if only slowly.  Probably a good buy if you think their recent issues are temporary. 

[mwtorock]

Buyback is a key message though - how many times you read about buyback in their releases?
from the 10k:
The Company is authorized under its stock buyback program to repurchase 1.6 million shares of Common Stock. As of April 27, 2019, 502,060 shares were purchased under the program and 1,097,940 shares were available for purchase. No shares of Common Stock have been repurchased during the last three fiscal years.

So they have 200m cash on hand, and are generating positive cashflows every quarter. If they just buy back 100m worth of stock, it would retire about 2.5m shares. If i remember correctly, there are only less than 12m shares floating and half of that is short.

And international expansion is highlighted again - from UK to Ireland to EU. Wondering who are their distribution partners there.

[Gregmal]

I saw the bit about the buybacks, but I think you really need to handicap this thing framed around the fact that the CEO is a full blown liability. There is so much to potentially like about this company and setup at these prices. But never have I seen a company with so many obvious call options on value creation be so negligent. You have an orchestrated campaign of misinformation, and during which sales plummet. And all you've gotten from it so far is Capporella highlighting to new investors how crazy and unhinged he is. European expansion is an unnecessary risk at this stage of the game. La Croix is an American culture thing. A new phenomenon. In Europe they've been drinking this shit for ages and don't care about the La Croix "message". Sodastream learned this the hard way too.

They've totally missed "hitting while the iron is hot" with several opportunities including spiked seltzer. Look at SAM... they've created a shit ton of value seeing a fad, buying into the market, milking it, and then reducing shelf space for the next one. All FIZZ has to do here is license the La Croix brand....Nope.

Valuation is a no brainer, but mismanagement is hard to ignore. Even the buyback. Given the dynamics here, why not tender? Why not at least show shareholders you're not an entrenched owner and at the very least, RUN a strategic review process and see whats out there? Private market value is easily $100 a share or more.

[Gregmal]

https://www.yahoo.com/finance/news/coca-cola-launches-its-biggest-new-drink-in-10-years-143007455.html

Remove Coke from the list of suitors.

I really haven't seen a company's CEO/majority owner neglect opportunities and purposely destroy value quite like Capporella has done.

Seltzer water becomes a trendy new millenial/health fad, ride the wave up...great

Competition marches in...close your eyes

Fallacious hit pieces destroy the reputation of your company...act like an ever bigger lunatic in your quarterly letters

Spiked seltzer becomes a craze...refuse to partner with an alcoholic beverage company

Several large soda/drink companies want in to the bubble water craze....refuse to even entertain putting your company up for sale


But hey, maybe he'll do another $2 special dividend. Since he's more or less just paying himself...