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5 Reasons to Add SodaStream (SODA) to Your Portfolio Now

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SodaStream International Ltd. has been witnessing good tidings for quite sometime now, with the stock price hitting new 52 week highs multiple times. The company’s performance in 2016 marked a comeback for this Israel-based manufacturer of home beverage carbonation systems with a market cap of around $1.04 billion.

The growing popularity of sparkling water is a major positive for SodaStream, as its cost-effective beverage carbonation systems help consumers transform ordinary tap water into soft drinks and sparkling water.

What Makes the Stock an Attractive Pick?

Share Price Movement: SodaStream’s shares advanced 145.2% in 2016. Also, shares gained 24.1% year to date, faring better than the Zacks categorized Consumer Products-Miscellaneous Discretionary industry’s decline of 2.9%.



Estimate Revisions: The company’s recent earnings estimate revision trend is encouraging. The current quarter has seen one upward estimate revision in the past 60 days while the full-year estimate has seen two upward revisions over the same time frame.

As a result, the current quarter consensus estimate has risen 15.2% in the past two months, while full-year 2017 estimates inched 35.2% higher, justifying the company’s Zacks Rank #1 (Strong Buy). You can find the consensus estimate trend and recent price action for the stock in the chart below:

SodaStream International Ltd. Price and Consensus

 

Additionally, estimates for 2018 have increased 23.2% in the last 60 days, hinting at the solid prospects ahead for the stock.

Valuation: Right now, SodaStream has a Price/Sales ratio of about 2.26, lower than the S&P 500 average of 3.09. The Price/Sales ratio approach compares a stock’s price to its total sales, where a lower reading is considered better.



Earnings & Revenue Growth: SodaStream’s earnings are expected to grow 16.6% in 2017 while revenues are likely to increase 5.4%.

The company surpassed estimates in each of the four quarters of 2016 at an average of 126.15%. In 2016, the company generated profits of $2.07 per share, reflecting a 102.1% improvement year over year on revenue increase of just 14.5%. This throws light on the company's strong business model, operating leverage and cost-control abilities.

VGM Score: The company flaunts an impressive VGM Score of ‘B’. Our VGM Score identifies stocks with the most attractive value, growth and momentum characteristics. In fact, our research shows that stocks with VGM Scores of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or 2 (Buy) make solid investment choices.

Other Key Picks

Apart from SodaStream, investors may consider stocks in the Consumer Products - Discretionary industry like NutriSystem Inc , Acme United Corporation (ACU - Free Report) and Prestige Brand Holdings, Inc. (PBH - Free Report) .

NutriSystem, a Zacks Rank #1 stock, is expected to witness 25.6% growth in 2017 earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.

Full-year 2017 earnings for Acme are expected to increase 9.9%. The company carries a Zacks Rank #2.

Prestige surpassed earnings in all of the past four quarters, the average beat being 6.9%.
 
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