Please ensure Javascript is enabled for purposes of website accessibility

Why National Beverage Stock Rose 13% in May

By Demitri Kalogeropoulos – Jun 5, 2020 at 1:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors sent shares higher as they started to look past the COVID-19 lockdown.

What happened

National Beverage (FIZZ 1.48%) shareholders outperformed a rallying stock market last month. The stock rose 13% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to April's gains to put the sparkling beverage producer in solidly positive territory, up 12% so far in 2020.

A woman enjoys a soda.

Image source: Getty Images.

So what

National Beverage had dropped along with bigger rivals like Coca-Cola during the stock market slump in late March as investors worried over reduced drinking occasions during home lockdowns. Coke and PepsiCo reported sharp volume declines, in fact, with Coke's April demand slumping by over 22%.

All three beverage stocks rebounded as the COVID-19 threat waned in May and as state plans to reopen retailing markets took shape. National Beverage's shares saw the most dramatic rebound, likely because of the company's focus on the high-growth sparkling water category.

Now what

National Beverage's La Croix brand posted steady growth in the months before the pandemic hit, and that marked a significant improvement from declines in 2019. The sparkling water segment is far more competitive today, though, and so investors shouldn't expect to see growth levels approaching the 20% surge that the consumer staples specialist posted in 2018. That fact, plus questions around demand trends through the recent retailing disruption, supports a cautious view about this rallying stock.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

National Beverage Corp. Stock Quote
National Beverage Corp.
$39.11 (1.48%) $0.57

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.