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Despite the shorts, Sodastream could be a sweet investment

By Emerging Money April 18, 2012, 10:30:45 AM EDT

Like most fads, fizzing stocks can fade out fast. That's true in more ways than one for SodaStream International ( SODA , quote ), an Israeli company with a 'make your own soda' beverage system whose stock price has gone a little flat.

[caption id="attachment_56712" align="alignright" width="140" caption="Sodastream: tasty bubbles dispensed from a penguin"] [/caption]

Over the last year, SodaStream is down by 23.17%. It has fallen another 5.62% in the last month, and the short position is of 71.25% is stunningly high.

So, is SodaStream as dead as New Coke ( COKE , quote )? Not necessarily.

There is much on SodaStream's balance sheet to prove the shorts wrong. SodaStream has $75 million in cash against just $4 million in debt. The price-to-earnings growth ratio is an encouraging 0.85.

In past earnings reports, SodaStream beat the estimates of the analyst community for five straight quarters. It sells its products in 42 countries, and has expansion plans for Asia and South America. The stock may be trading around $35 a share, but the mean analyst target price for SODA over the next year is $47.35.

Carbonated sugar water is one of the most popular drinks on the planet, and SodaStream has found a clever do-it-yourself niche to occupy. The stock may be flat for now, but the best thing about having a SodaStream unit is that you can always pump the air back in.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, International, Stocks

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