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Thursday, November 4, 2010

Jim Cramer on Gauging SodaStream’s Potential for Success

Gauging SodaStream’s Potential for Success


By: T. Brennan

Web Editor, Mad Money



If the stars align for SodaStream, Cramer said Wednesday, this beverage company could be the next Hansen Natural, or maybe even Green Mountain Coffee Roasters, delivering near four-digit returns or greater for investors who get in on the ground floor.









SodaStream [SODA 30.00 5.88 (+24.38%) ] makes blender-sized soda makers, sold at Williams-Sonoma and Bed Bath & Beyond, that turn water into seltzer. In addition to the carbon dioxide refills needed to run the machine, SodaStream also sells more than 100 mix flavors. The device saves you money on store-bought soda—one $4 mix bottle makes 12 liters, or 33 cans, of soda—it’s environment-friendly, and the flavors carry two-thirds fewer calories than the leading soft-drink brands.Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)



There’s no guarantee this will catch on, though. Sure, SodaStream might see the meteoric growth of Hansen [HANS 51.12 -0.17 (-0.33%) ], which soared nearly 1,000 percent between 2004 and mid-2006, or Green Mountain [GMCR 33.88 -0.41 (-1.2%) ], which saw huge gains of 1,173 percent after acquiring single-cup coffee brewer Keurig in May 2006 up until Sept. 30 of this year. But then again, this company could go the way of Jarden, maker of the Jimmy Buffett Margaritaville frozen-drink maker, a stock that “hasn’t done a lot in a long time,” Cramer said.


That’s why he didn’t want investors rushing in just yet. SodaStream IPO’d on Wednesday, opening at $24.75, or 24 percent higher than the $20 offering price. But a successful public offering doesn’t necessarily make for a successful public stock. To do that, the company will in the very least need to find the same success it’s had in Europe here in the States as well.

Mad Money w/ Jim Cramer Bear Squeezie

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