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General Category => Investment Ideas => Topic started by: Martian on March 11, 2013, 07:41:51 PM

Title: FIZZ - National Beverage Corp
Post by: Martian on March 11, 2013, 07:41:51 PM
The company has a market Cap of 640 millions. It develops and sells soft drinks, energy drinks and shots, juices, teas, still and sparkling waters.  Brands include Shata, Faygo (both more than 100 years old) Ritz, Rip It, Everfresh, Mr Pure. It owns twelve manufacturing facilities and the bottling network.

The management is with the company for a long time. It has great numbers. 

Colas account for less than 20% of the total volume. No one customer accounts for more than 10% of net sales.

I just initiated a very small long position today. Might add to it if it goes down more..
Title: Re: FIZZ - National Beverage Corp
Post by: rockket on March 12, 2013, 03:06:37 PM
looks interesting.

do you think this is a good business, or just cheap?

any idea what the bull vs bear thesis is?

i like that it's a low multiple w/ no analyst coverage. great ROICs. the brands don't stick out particularly to me as things that have real "franchise value" though. i'm not too familiar with the industry though.
Title: Re: FIZZ - National Beverage Corp
Post by: Packer16 on March 12, 2013, 03:20:40 PM
You may want to compare to COT another smaller soda bottler with "second" tier brands.

Packer
Title: Re: FIZZ - National Beverage Corp
Post by: DTEJD1997 on August 08, 2013, 01:30:32 PM
Hey all:

Selling FIZZ was one of the biggest mistakes I ever made.

You see, I bought it back in the early 90's at 4 3/8's a share.  400 shares I owned.  I remember it clearly as I was a student at Grand Valley State University.  I thought it was so very interesting that I owned stock in a company whose product I bought and used.  Specifically, Rock & Rye was one of my favorite drinks!

Living in Detroit, you could get Faygo bottles at the corner store.  It was (and is) a great brand.

Anyway, to make a long story short....I sold because I more than doubled my money!

Had I held onto those shares, I would have well over 100X gain.

Oh well, hopefully I'll know better next time...

Well, all is not lost...family members bought shares back in the early 2000's and have done very well.
Title: Re: FIZZ - National Beverage Corp
Post by: ItsAValueTrap on August 08, 2013, 07:32:51 PM
Good thing you didn't buy JSDA.  I enjoy Jones Soda occasionally.
Title: Re: FIZZ - National Beverage Corp
Post by: MYDemaray on August 09, 2013, 07:25:24 AM
Hadn't looked at JSDA in years...thanks for bringing that up.  What a beautiful cautionary tale and reminder about competitive advantage and growth-based valuations.  Jeesh.
Title: Re: FIZZ - National Beverage Corp
Post by: DTEJD1997 on August 09, 2013, 08:42:20 AM
yeah, Jones soda has some pretty good tasting stuff...

However, as an investment, it looks like it is sub-par.

FIZZ has been a tremendous success over time.  They've paid out a TON of dividends.

Title: Re: FIZZ - National Beverage Corp
Post by: fareastwarriors on April 07, 2016, 10:31:22 AM
LaCroix Bubbles Up in Sparkling Water Brand Competition

Once regional brand outshines rivals at Nestlť and Coke with quirky marketing

http://www.wsj.com/articles/lacroix-bubbles-up-in-sparkling-water-brand-competition-1460047940 (http://www.wsj.com/articles/lacroix-bubbles-up-in-sparkling-water-brand-competition-1460047940)
Title: Re: FIZZ - National Beverage Corp
Post by: ScottHall on May 24, 2017, 11:59:10 PM
I have completed my PROPRIETARY RESEARCH video on this stock, which you can now find in my signature or in the link below. I will be continuing my sabbatical, but my discovery of a brand new and as-of-yet undiscovered MARKET OPPORTUNITY for LaCroix made me feel obligated to share this research while it is still timely...

https://youtu.be/XVQW5GyaVbI
Title: Re: FIZZ - National Beverage Corp
Post by: valcont on May 25, 2017, 07:09:53 AM
I have completed my PROPRIETARY RESEARCH video on this stock, which you can now find in my signature or in the link below. I will be continuing my sabbatical, but my discovery of a brand new and as-of-yet undiscovered MARKET OPPORTUNITY for LaCroix made me feel obligated to share this research while it is still timely...

https://youtu.be/XVQW5GyaVbI

My worst investing mistake ever (hopefully). It was selling at $21 couple years ago and I waited to pick it at $16-17. Still waiting. Last time I checked , the owner was older and trying to get the distribution rights with Walmart etc. Did he drop dead and some PE bought it or are there buy out rumors to justify this price appreciation?

Wish I had read Scott's views about momentum investing then. Value investing is load of bullsh.. sometimes
Title: Re: FIZZ - National Beverage Corp
Post by: fareastwarriors on May 25, 2017, 09:27:21 AM
Do you think this company will get bought out by the bigger boys (Pepsi/Coke/Nestle)?
Title: Re: FIZZ - National Beverage Corp
Post by: ScottHall on April 06, 2018, 11:20:21 PM
I bought more of this a few days ago.
Title: Re: FIZZ - National Beverage Corp
Post by: doughishere on April 07, 2018, 06:34:12 AM
I bought more of this a few days ago.

Same here....rolled a bunch of tax refund money into it. Thanks for the idea Scotty.
Title: Re: FIZZ - National Beverage Corp
Post by: gjangal on April 10, 2018, 11:43:08 AM
i put in a few bucks, a 20% grower with 27% of float short is an interesting situation.
Title: Re: FIZZ - National Beverage Corp
Post by: big_triece on April 10, 2018, 12:10:11 PM
Scuttlebutt Investor's presentation on brands - https://static1.squarespace.com/static/5309a1aee4b0695e51427115/t/5ac9afbd352f53a44fd71bd3/1523167186878/Brand+as+a+Competitive+Advantage+4.7.18.pdf

includes a case study on FIZZ
Title: Re: FIZZ - National Beverage Corp
Post by: wisowis on May 17, 2018, 06:03:57 PM
How cult-ish is LaCroix? Enough so that people are making color palettes for data visualization tools based on the flavors  :P

https://twitter.com/dataandme/status/995486050821791744
Title: Re: FIZZ - National Beverage Corp
Post by: gjangal on June 27, 2018, 08:44:03 AM
https://www.wsj.com/articles/the-sec-has-had-its-own-questions-about-lacroix-1530045407

Title: Re: FIZZ - National Beverage Corp
Post by: gjangal on March 08, 2019, 04:27:58 AM
Earnings release comments by the ceo, i own this and i donít know what to say. itís just crazy. stock down 20%

https://finance.yahoo.com/quote/FIZZ?p=FIZZ&.tsrc=fin-srch
Title: Re: FIZZ - National Beverage Corp
Post by: gfp on March 08, 2019, 05:10:37 AM
Yeah the CEO has always been odd.  We buy LaCroix in my household and we started buying it through Costco and not the grocery store.  That is probably a negative for LaCroix margins.  What happened in my grocery store is that 1) LaCroix lost the prominent end cap it had always occupied, 2) LaCroix stopped offering the 15 pack at around the 12 pack price, and 3) they slightly raised their prices of the 12-pack-only offering to the point where it is easy to skip as an unnecessary luxury.  We have a soda stream machine as well, and the only LaCroix flavors we buy are Lemon, Lime and Grapefruit - nothing exotic that we can't get with the cheaper soda machine option.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on March 08, 2019, 05:20:26 AM
The CEO letter was quite peculiar, but he's always been that way.

Frankly, I am not shocked by the poor results given the ridiculous allegations that made national headlines in October and November. This was a bit of a fad, but it also has it's niche and is still a premier brand.

Adding to gfp's comments, I have never bought this is a grocery store. I buy it at Costco. I go through maybe 8-10 cans a day. I did notice Costco blatantly ripped them off about 6 months ago. I tried the Costco and its mediocre but then, quite surprisingly, Ive noticed lately La Croix completely changed their Costco pack from the traditional flavors. I still buy it, but not sure if that's the case for everyone.

I would think we see some stabilization in sales. Sparkling water is a growing market, La Croix can lose share and still grow revs. Bottom line though, IMO is that the only real upside catalyst at the moment is the CEO putting the company up for sale. Which, if he truly feels an injustice occurred, might be the best way to prove the naysayers wrong.
Title: Re: FIZZ - National Beverage Corp
Post by: gjangal on March 08, 2019, 05:33:15 AM
Thanks for the color. My initial thesis is broken, i assumed that they were going to revenue grow at high single digits with some operating leverage. The company had 20% of float short at the time , which for a growing company was a prime short squeeze situation

I have to dig into the filings to see what happened.

 
Title: Re: FIZZ - National Beverage Corp
Post by: mwtorock on May 03, 2019, 06:16:44 AM
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.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on May 03, 2019, 10:28:50 AM
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.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on September 03, 2019, 03:56:37 PM
https://twitter.com/MarioGabelli/status/1168209149483728896

Been debating buying a few $35 calls. Stock seems to have some support around the $40 mark.
Title: Re: FIZZ - National Beverage Corp
Post by: Spekulatius on September 03, 2019, 04:22:43 PM
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.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on September 03, 2019, 04:27:03 PM
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.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on September 05, 2019, 02:37:10 PM
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

LaCroixís 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?
Title: Re: FIZZ - National Beverage Corp
Post by: SHDL on September 05, 2019, 03:54:37 PM
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.   :P

Jokes aside, the valuation does look like itís 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. 
Title: Re: FIZZ - National Beverage Corp
Post by: mwtorock on September 06, 2019, 06:55:13 AM
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.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on September 06, 2019, 07:14:22 AM
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.

Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on November 07, 2019, 04:59:06 PM
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...
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on December 28, 2019, 01:19:47 PM
After continuing the rounds of holiday gatherings it continues to amaze me the share of right and/or left hands that White Claw possesses. To which my only thoughts continue to be, Nicholas Capporella, what the fuck are you waiting for? A LaCroix hard seltzer announcement would probably double the valuation here overnight.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on February 20, 2020, 10:57:57 AM
https://www.businesswire.com/news/home/20200219005533/en/

Potentially huge implications from this. I bought some this morning
Title: Re: FIZZ - National Beverage Corp
Post by: roark33 on February 20, 2020, 11:48:19 AM
What are the implications?  Other products have gained significant traction in the past year as this "lawsuit" and related PR caused people to try other products, most notably, Bubly and Spindrift. 

Just not sure someone retracting that lawsuit matters after the damage has already been done. 

Remember when Tilson said, whoops my bad on the accusations against Lumber and then Lumber became a 10B company in the following year as sales/profits recovered dramatically? 

Just kidding, that didn't happen. 
Title: Re: FIZZ - National Beverage Corp
Post by: gfp on February 20, 2020, 11:54:08 AM
other products, most notably, Bubly and Spindrift. 

Most notably, Kirkland.  Costco has a huge hit with the Kirkland version of LaCroix.  I hope for FIZZ's sake that they are actually the manufacturer of the Kirkland stuff, but I doubt it.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on February 20, 2020, 12:05:19 PM
Others have gained market share for sure but at the end of the day La Croix is still the premier name is that space. This has been a MAJOR distraction for Caporrella. Clearing the skies cant undo market share losses, but it can let the brand recover. Sparkling water is a growing product category, there is plenty of money there for everyone. It would be one thing if this had 50% market share and a $10B market cap; it doesnt though. La Crox additionally should be launching several new flavors/products this year, which probably reinvigorate the brand a bit. But I think given the absurd level of focus and time spent by the company on getting this verdict, that the next logical step is to repair the harm done to shareholders. If anyone is familiar with the ownership breakdowns here, its not hard to see several very easy ways Caporella can make a lot of noise.
Title: Re: FIZZ - National Beverage Corp
Post by: roark33 on February 20, 2020, 12:08:12 PM
Yeah, Kirkland too.  Also, price compression at grocery stores has been a real thing as Bubly has just been endlessly discount happy.

Not disagreeing with you completely and I own some shares, but I seriously doubt Nick does anything about this.  he has owned the same percentage of this company for the past 10 years, probably longer than that.  He is just happy to write his press releases and collect dividends every 2 years.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on February 20, 2020, 12:18:29 PM
Hopefully this allows him to turn his focus. I dont think the current valuation is all that bad regardless. There was a ton of resiliency around $40 even with the overhangs and terrible results. Comps look somewhat favorable here, and you've also now largely gotten this whole ordeal put to bed. Given the still huge short interest and all, I think its somewhat compelling. A corporate action, some have discussed a large tender, would set this thing on fire.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on March 05, 2020, 01:53:00 PM
https://www.businesswire.com/news/home/20200305005854/en/

Starting to see some improvements here, with some big product launches weeks away.
Title: Re: FIZZ - National Beverage Corp
Post by: mwtorock on March 06, 2020, 06:11:40 AM
Buyback actually did happen - 4.3m for 100k shares in the quarter. Still over 260m in cash.
Title: Re: FIZZ - National Beverage Corp
Post by: gfp on March 06, 2020, 06:47:26 AM
https://www.businesswire.com/news/home/20200305005854/en/

Starting to see some improvements here, with some big product launches weeks away.

"ďThe numbers reflect the effects of a strategy that generated increased momentum of brand LaCroix. LaCroix has returned to positive growth in a much different sparkling water category that existed prior to October 2018, when litigation slowed the growth of LaCroix, which also affected the growth of the total sparkling water category."

The CEO is just so odd...  No LaCroix customer that I know was even aware of this litigation, much less let it influence their purchasing behavior.  The CEO seems like the only one who cared about this litigation and thought it was a big deal.  Competition is so much more of a factor than "winning" a lawsuit or remaining "authentic" or whatever else he is fixated on...
Title: Re: FIZZ - National Beverage Corp
Post by: bilo on March 06, 2020, 07:56:30 AM
It has been explained many times.  The litigation itself had almost nothing to do with the harm done to the LaCroix brand.   These types of lawsuits are a dime-a-dozen and are usually settled quietly.  One of the ginger ail brands had a similar incident and literally no one heard about it.

The actual cause of the damage to the LaCroix brand was the media firestorm that erupted in fall of 2018 when "click bait" media started running with language in the Law firm's press release that absurdly referenced, "cockroach poison" as an ingredient.   This proved to be, and still is, the greatest attention the brand has ever received in its history, and it was revoltingly negative.  Go to Google Trends and search, "LaCroix water" and look at 5 year data.  The enormous spike you see is the week or two after the media-induced hysteria.    This media hysteria triggered an -immediate- reaction in shelf-space allocation by retailers.  They panicked at a truly horrendous time for FIZZ, as enormous levels of new competition was coming to market.  It was an incredibly fortuitous bit of luck for Bubly and others.   

Regardless, the quarter was very good.  Many companies would have been devastated by the "cockroach" pr event (Audi USA was almost destroyed by their "unintended acceleration" fiasco in the late 80's, which also turned out to be totally bogus media hysteria, for example.) In my view what occurred to  FIZZ was one of the worst (both in terms of impact and the utter unfairness) PR disasters of all time.  Yet here is FIZZ, chugging along throwing off tons cash flow. 

Technical float is only 25% of outstanding shares..  Looks to me like average price on repurchases (first in 17 years) was just over $40.. so if they (CEO, really) want to defend that level IMO its not sane to be short as if CEO sees value there, could be taken private at any time or cut float 25% or more, etc.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on March 06, 2020, 08:14:26 AM
Very well said. FIZZ has very much been an investment reliant on narratives. The narrative just changed. Comps have inflected, and summer is coming with big new product launches. Given the setup and degree to which $40 has held throughout the worst of times, I like it. Massive short interest makes it all the better.
Title: Re: FIZZ - National Beverage Corp
Post by: roark33 on March 06, 2020, 09:10:44 AM
I have never been one of the tin-foil hat conspiracy types, but the idea that Pepsi had something to do with the lawsuit is more than a 0% possibility. 
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on March 06, 2020, 04:20:28 PM
Perhaps just a useless observation, but the noted volatility around 3:45 coincides with the exact time company buybacks must be pulled for the day. Wouldn't be shocked if they are now in the market @$45
Title: Re: FIZZ - National Beverage Corp
Post by: bilo on March 06, 2020, 08:01:05 PM
Gregmal, agree the volatility was very odd last 30 minutes of the day - looked like a seller attempting to suppress new highs to me.  Very interested to hear that about the buybacks.  where can I find the other technical rules, if you happen to know?  Thanks. 
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on March 06, 2020, 08:25:00 PM
Gregmal, agree the volatility was very odd last 30 minutes of the day - looked like a seller attempting to suppress new highs to me.  Very interested to hear that about the buybacks.  where can I find the other technical rules, if you happen to know?  Thanks.

Securities lawyers and scouring the SEC rule book lol. Yea Iíve dabbled down that long and arduous road before with many a small cap company. I forget specifically but as it relates to here, my recollection is that under $500k average volume 3:30 is the cut off for repurchases, which can not exceed 25% average daily volume. If itís over, youíve got til 3:45 with the same volume restrictions. Donít quote me on the exact numbers but thatís the gist of it.
Title: Re: FIZZ - National Beverage Corp
Post by: bilo on March 09, 2020, 06:04:46 PM
Incredible rally from the low to the close today, almost 22% - have to wonder if the Co. turned the buyback spigot on. 
Title: Re: FIZZ - National Beverage Corp
Post by: roark33 on March 09, 2020, 09:08:00 PM
There really wasn't any liquidity in the stock, the trades at 37 were really one-off.  I tried to buy at 37 for over an hour and had to move the bid up to 39.5 to get it filled.
Title: Re: FIZZ - National Beverage Corp
Post by: mwtorock on March 11, 2020, 06:16:59 AM
https://www.wsj.com/articles/pepsico-nears-deal-to-buy-energy-drink-maker-11583893495?mod=hp_lead_pos3

PepsiCo Inc. on Wednesday agreed to buy Rockstar Energy Beverages, in a move that would expand the beverage giantís presence in the fast-growing energy-drink category. PepsiCo is to pay $3.85 billion for Rockstar.
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on March 12, 2020, 10:00:43 AM
FIZZ you motherfucker. Tomorrow we'll rebound and you'll be -5%....Such is life.
Title: Re: FIZZ - National Beverage Corp
Post by: roark33 on March 12, 2020, 10:55:47 AM
I sold most of my FIZZ at these prices, not because I don't think there is upside, but there is just so much more upside in other things out there now. 

AHA selling for 2.99 at my local store.  FIZZ still at 3.99. 
Title: Re: FIZZ - National Beverage Corp
Post by: Gregmal on July 02, 2020, 03:16:06 PM
https://seekingalpha.com/news/3588224-national-beverage-jumps-8_9-lacroix-drives-record-sales

Boom.