Whitney Tilson VIC: Long SODAStream Thesis

Whitney Tilson VIC: Long SODAStream Thesis
Whitney Tilson

Whitney Tilson is the Founder and Portfolio Manager of Kase Capital, a value-oriented hedge fund. He is the Chairman of Value Investor Insight and the co-author of The Art of Value Investing. He is co-founder and Chairman Emeritus of the Value Investing Congress.

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Whitney Tilson spoke at the 9th Annual Value Investing Congress, also see Whitney Tilson shorts montage technology, NQ Mobile Inc (ADR) (NYSE:NQ). Below are notes from his presentation.

Morningstar Investment Conference: What To Do During The Fed Rate Hiking Cycle

Federal reserveThe U.S. Federal Reserve is treading carefully with raising rates amid the widespread economic, macro and geopolitical uncertainties sweeping around the world. The Fed raised its target level as high as 20% in the early 1980s to deal with runaway inflation, but we're a far cry from that today — a time when inflation threatens Read More

Editors note: We earlier reported that Tilson would be announcing that he was long SODA and short ONVO at VIC. There is a media embargo which just ended. However, since this information was obtained through a reader, we posted it before the embargo ended. Readers can find the presentation here.

Highlights from Whitney Tilson’s presentation

Long Idea:  Sodastream International Ltd (NASDAQ:SODA)

Beaten down with high short interest

Its not a fad

Fixable problems

Bought 4% position at $37.65

Issue: deceleration in U.S. sales growth but it was 16% last year which is good

Gross margin dropped as they discounted heavily in Q4 to make money on consumables and tough market


Large global market

2% of sparkling water

7 million installed base and 4.4 million in 2013 alone

Healthy balance sheet

In Switzerland 25% margin; in US it’s only 5%

As consumables business grows in US that will change

Has a moat. Global manufacturing

Stock $43, market cap, $923M, EV $900M, EPS $2

Not cheap on PE and EV to EBITDA

Western Europe business alone worth $35 or more

Co2 consumables business alone worth market cap, so you’re getting the rest of the business for free

Does not see Ko Keurig as being successful as higher likely prices for their machines – what’s the value add over a can of coke?

Tilson Sodastream Article Survey Results Whitney Tilson Kase Capital 3-5-14 by scribdvw

Whitney Tilson Why Im Long SodaStream by scribdvw

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