Sodastream International Ltd (SODA) Crushes It (Again) … but Is the Stock a Buy?

That’s also not to mention other worrisome reports that SodaStream management may have been quietly trying to sell the company over the past few months to no avail, which not only calls into question their resolve in standing behind the company for the long term but also makes you wonder why no suitor has stepped forward to acquire the entire business.

Of course, the same report also pointed out PepsiCo, Inc. (NYSE:PEP) had wanted only to buy SodaStream’s highly profitable CO2 refill business and not the appliance itself — but can you blame them? As I pointed out in June, it simply wouldn’t make sense for Pepsi to buy an entire product line that would cannibalize its core canned and bottled product sales, while at the same time angering the bottlers that rely on its enormous existing business to sustain their own operations.

Buy high, sell higher?
But despite the possibility that management may have been trying to sell themselves short, perhaps this solid report will both strengthen their resolve and encourage long-term investors that SodaStream is here to stay.

And even though the stock is up big so far in 2013, it’s also worth noting the company has been growing into its valuation nicely, as shares currently trade for under 31 times last year’s earnings and just over 20 times next year’s estimates, which I think is a fair premium given SodaStream’s growth.

In the end, then, I see no reason SodaStream won’t continue to handsomely reward patient long-term investors who buy now.

The article SodaStream Crushes It (Again) … but Is the Stock a Buy? originally appeared on Fool.com and is written by Steve Symington.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, Green Mountain Coffee Roasters, PepsiCo, and SodaStream and owns shares of PepsiCo and SodaStream.

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