SodaStream Popped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Something's up at SodaStream International (NAS: SODA) . Actually, two somethings: (1) the stock price, which is skyrocketing like a bottle of Mentos-fueled Diet Coke and (2) whatever the heck it was that caused the eruption.

So what: It's not uncommon to see a stock pop after reporting strong earnings. It's a bit less common to see what we're seeing here today: SodaStream stock jumping 11% on merely the confirmation that it's going to report earnings two weeks from now. Earnings that could very well be strong, but that could just as easily be weak.

Now what: Call me a cynic, but if I were a SodaStream shareholder, I'd be counting my blessings ... and counting my winnings today, as I scoop chips off the table. I mean, why wait for details on how SodaStream did last quarter when Mr. Market is handing you your profits today, no details required?

The more so when you consider that at a price north of 72 times earnings, there's a very real possibility that anything less than a blockbuster quarter will explode this overpriced, overhyped fizz bottle. With a $1.4 billion market cap, SodaStream has minimal earnings and is actually burning cash. To me, that doesn't sound like a formula for success. But if Mr. Market sees fit to reward it today, I'd take the money and run.

Bears versus Bulls -- who will carry the day?Add SodaStream International to your Watchlistand find out.

At the time thisarticle was published Fool contributorRich Smithdoes not own (or short) SodaStream International, butMotley Fool newsletter serviceshave recommended buying shares of it.Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.

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