Fevertree

“It’s a mixed day for the markets with the FTSE 100 down 0.4%, the FTSE 250 flat and most of the major indices in Continental Europe down slightly. After moderate gains on Wall Street last night, Asian stocks struggle to find direction on Thursday with Japan’s Nikkei index down 0.1% and Hong Kong’s Hang Seng index up 0.4%. “On the UK market, Vodafone is the top faller on the FTSE 100 with investors perhaps having low expectations for its trading update on Friday. Healthcare stocks, oil producers and utilities also serve to drag down the blue chip index,” says Russ Mould, Investment Director at AJ Bell.

Fevertree

“After six months of radio silence with regards to trading health, premium mixers group Fevertree has finally updated shareholders on its progress and it’s a corker of a performance.

“The core UK business is doing well and, perhaps mostly importantly, sales in the US are taking off.

“A lot is riding on the business being a hit in the US. Many British companies have failed to emulate success at home in other geographical territories so it is pleasing to see Fevertree being one of the lucky few to have the right ingredients to crack the market.

“Having a good product doesn’t guarantee you success in another country. A lot is also riding on understanding cultural differences and being red hot on marketing. Fevertree is working with North America’s largest wines and spirits distributor, Southern Glazer’s, and so far it looks like the two are having a whale of a time.

“Fevertree is a true British success story and being able to spread its wings abroad is important for several reasons. It helps to champion the UK as a source of British business excellence and it provides welcome diversification so Fevertree isn’t dependent on one market. It also helps to fuel momentum in its investment case which has seen shareholders enjoy stellar returns since the business joined the stock market in 2014.

“The downside of this growth euphoria is that there is no room for error. Any hiccup by Fevertree would result in its share price being truly punished by the market which is currently pricing in flawless execution.

“The current biggest fear is that UK growth will slow. Fevertree therefore has a short window by which to strengthen its position in US and Continental Europe to act as a cushion should the market start to fret about its homeland.”

These articles are for information purposes only and are not a personal recommendation or advice.