Canadian generic soda pop maker Cott (NYSE:COT) on Friday afternoon said it plans to build another manufacturing facility in the United States -- this would be its ninth here and its 20th worldwide.
The plant will boost production by 40 million cases annually and add 130 employees to its rolls while raising the company's 2004 capital expenditures by some $10 million, to $65 million. But given Cott's recent performance and growth goals, it seems likely that the money will be well spent.
Cott, a key Wal-Mart (NYSE:WMT) supplier, has performed well since we last looked at it in December. Flying largely under the radar of competitors like Coca-Cola (NYSE:KO), Cadbury Schweppes (NYSE:CSG), and PepsiCo (NYSE:PEP) because its products carry its customers' brands rather than its own, Cott's first-quarter results were impressive. The company said in late April that Q1 sales rose 26% to nearly $371 million, while EPS jumped 40%.
All told, Cott is a company that is performing well worldwide. It appears that a recent management transition (the company said in March that President and COO John Sheppard, a former Coca-Cola executive, will replace Frank Weise as CEO in September, though Weise will remain chairman) won't upset the soda cart. The word, however, is clearly out: The company's shares have crushed the S&P 500 over the last 12 months, and they now command a multiple of more than 25 times management's high-end estimate for 2004 EPS.
With profits growing approximately 15% year over year, the stock seems fully valued at the moment, but there's nevertheless plenty to like about Cott, which I'll be watching closely. Management was upbeat and ambitious at its recent annual meeting, and it certainly seems to know what it's talking about.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.
