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Sunday, September 8, 2013

Make money while drinking soda

Probably everyone knows Coca-Cola (KO) or Pepsi. They get rich, super rich by selling soft drinks. Actually people around the world are addicted to soft drinks, which will never change and continue so forever! That's why you can become very rich  by simply holding KO shares with reinvestment of its dividends for long time, even if KO stock itself is not going anywhere. This is how Buffett has becomes so rich. Well, now you may also invest in another type of soft drink company, which appears to be an emerging star in the soda industry. I'm talking about SodaStream International (SODA).

SodaStream develops, manufactures, and sells home beverage carbonation systems that enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water. Nowadays, people love DIY, Do It Yourself. You see, you can buy modern style of furniture from IKEA to put things together tailored to your personal taste. You want to select additional features for a new car you want to buy to meet your own interest. You love the DVR programming function on your cable TV to watch whatever and when you want......  I can go on and on. This is the trend, a huge trend that people simply want their own way of doing things or to have everything personalized as much as possible. It is the same thing about what and how to drink soda water. SodaStream catches the opportunity and is revolutionizing the way soda is made. With SODA's system you can have complete control over the contents and flavor of your soda. This has become a huge business now. SODA has reported very strong earning results and  is predicting year-over-year revenue and net income growth of 25% and 18% for 2013. Not only its business in the US is growing quickly, it has also expand its sales in Asia and Western Europe. SODA is also doing more partnerships to further strengthen its business. Recently it announced that it will work with Whirlpool Corp for a joint effort aimed to develop a carbonation system that will carry the KitchenAid brand. Another huge potential for SODA that not many people are talking about is that, with its increasingly successful business model, the chance of it being acquired will substantially increases.

SODA has come down from its high recently. If the general market tumbles, SODA may go down further. It will be a great buying opportunity for this young company with huge potential. It will likely to be the next generation of Coca-Cola, if it is not bought out by KO eventually.

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