Is SodaStream a Risky Buy?

In this video, Motley Fool analyst Jim Mueller talks about the risks associated with SodaStream (Nasdaq: SODA  ) . As a high-growth company, SodaStream attracts competition, which is one of the risks. It's not had much in the way of competition as it provides customers with everything for making sodas. However, there are some alternatives available in the market, and competition is coming. Also, soft-drink giants Coca Cola and Pepsi can either release their own soda makers or buy out SodaStream.

Jim also focuses on inventory risk. As inventory levels have been high compared to sales in the past, investors should be watching these. Convenience and location are other factors. As certain parts of the soda maker need to be replaced once used up, consumers should be able to buy these at convenient locations, which is why SodaStream needs to start supplying more retail stores including Walmart and Best Buy.

Lastly, Jim focuses on the popularity of SodaStream and whether or not it can become a fad. Consumers might switch to the new, healthier, and more eco-friendly way of getting soda, but might end up switching back to their old habits of getting their soda in cans and bottles.

SodaStream's carbonation technology sounds simple, right? As Jim mentioned, this razor-and-blade company offers an intriguing opportunity for growth that may be harder to duplicate than you might think. Our premium report on SodaStream explains the opportunities as well as the risks in the company. The report comes with a year's worth of updates, so just click here to get started.


Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2168300, ~/Articles/ArticleHandler.aspx, 8/28/2014 5:12:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement