SodaStream International Ltd. SODA recently dismissed a cease and desist letter from the International Bottled Water Association (“IBWA”) which demanded the discontinuation of the company’s video campaign, "Shame or Glory." The video promotes the use of local tap water for making sparkling water at home, discouraging the use of water available in plastic bottles.
IBWA is a trade association of companies in the bottled water industry. The association battles attempts to ban or tax bottled water and is also involved in drafting bottled water regulations adopted by some state governments. In its letter to SodaStream, the association claims that bottled water is safer than tap water.
On the other hand, SodaStream highlighted the adverse effects of plastic to defend its stance on the matter. In the U.S., around 52 billion plastic bottles are dumped in landfills, parks or oceans every year. It also emphasized on the potential threat of plastic to marine life and reminded that U.S. tap water is considered one of the safest and cleanest water on earth.
SodaStream believes that IBWA is nothing but “an elite group of like-minded corporate sponsors who prioritize their own profits over the care of our planet.” The company also reported that IBWA gains financially from two hundred million plastic water bottles their industry makes every day.
Investors should keep in mind that SodaStream recently reported impressive results for the third quarter of 2016, beating the Zacks Consensus Estimate on both counts. The company’s adjusted earnings of 69 cents per share crushed the Zacks Consensus Estimate of 24 cents by 187.5%. Earnings increased a robust 213.6% on a year-over-year basis as well.
Considering its strong financial position, SodaStream is likely to be able to invest more in marketing campaigns and defend its stance in case any litigation crops up .
SODASTREAM INTL Price
SodaStream carries a Zacks Rank #2 (Buy).
Other Key Picks
Other favorably ranked stocks in this industry include The Container Store Group, Inc. TCS, Acme United Corporation ACU and FTD Companies, Inc. FTD.
Container Store – expected to see a 145.5% rise in fiscal 2017 earnings – sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Acme – a Zacks Rank #2 stock – is likely to witness an 18.9% increase in full-year 2016 earnings.
FTD Companies, also a Zacks Rank #2 stock, is expected to witness a 1.72% decline in full-year 2016 earnings.
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