Author: Joseph Agresti
Covestor model: China & India
Disclosure: Long position in SODA and GTAT at the time of writing
Going into spring I have added SodaStream (SODA) to my portfolio at $34.20. I believe the reaction after the company’s fourth quarter earnings miss was overdone and decided to make it my largest position. SODA is a unique company with very positive growth prospects for both sales and earnings per share. It is trading at a forward earnings multiple of $18.75.
That is normally a hefty valuation for a cyclical stock. However, this is a company that has proven it can grow revenues and EPS at an even faster rate. The large short interest in the company should provide fuel for it to move higher. This is a temporary position for me and I will consider selling when I believe a majority of the short positions have covered.
My second largest is GT Advanced Technologies (GTAT). It is currently not a market darling with a forward earnings multiple of 5. I tend to favor misunderstood or out of favor equities in the expectation that the true value story will play out. I maintain my 1,600 price target for the S&P 500 by year end.
