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1) $FIZZ My 6 year investment journey that ended with the $GME #reddit short squeeze. If you follow me, or read my timeline, you would know $FIZZ has been my largest position since 2015. I have now exited the position during the market short squeeze.
2) For years I had been looking for the next big beverage stock after the success of $MNST, $SBUX, Red Bull, Vitamin Water. I committed that if I found a small to midsize market cap beverage company on trend I would make it an outsized position in my portfolio.
3) I was always on the lookout for new drinks. Around 2015, I saw a neighbor drinking LaCroix sparkling water. Mainly, I noticed the bright cans, but I had never even heard of the brand. At that point, I had never sipped sparkling water, and knew nothing about it.
4) Immediately, I was intrigued. I went to the store and bought the product. I researched that this was a public company, National Beverage, ticker symbol $FIZZ. One of the first things I noticed is LaCroix is growing at over 30% (p. 8): https://ir.nationalbeverage.com/static-files/e80953b8-3f4c-4a66-99c6-b4d8f3881051
5) Next, I realize that sparkling water (p. 37) is likely going to take huge share from Big Soda. Now, I am intrigued. The company is growing the top line and has no debt on the balance sheet. It is 75% owned by the Caporella family.
6) It takes me a long time to warm up to investment ideas, friends, trips, etc. I needed one more piece to tip me over the edge. Then, I found the incomparable @natstewart5 on Seeking Alpha. He was bullish in Sept. 2014 in the teens: https://seekingalpha.com/article/2467375-why-i-am-bullish-on-national-beverage
7) With @natstewart5 validation I am in. I begin to build a position in the back half of 2015 with an average price of $32.19. I am strongly convinced at this point, but there are seeds of doubt because the name attracts controversy and is highly shorted which plays out in '21
8) Over time, the short interest will grow from 20% of the float to near 70% of the float. The next few years the stock takes a wild ride from the $20s to near $130 a share. At this point, I am steadfast, I think I am sitting on the next $MNST.
9) Come 2018, I decide to attend the annual meeting at the Hyatt Regency in Orlando, FLA. I finally meet @natstewart5 , great guy. We attend the meeting and we meet the WIZARD behind LaCroix, Nick Caporella. The share price is around $100.
10) The same week as the shareholder meeting, a lawsuit is filed that claims LaCroix contains roach poison. ( https://www.usatoday.com/story/money/nation-now/2018/10/05/lacroix-lawsuit-claims-sparkling-water-ingredients-cockroach-insecticide/1532241002/) This was obviously a hit job by the shorts, but they would not triumph in the end.
11) After the lawsuit, the stock makes a brutal 2.5 year fall bottoming around $35 at the height of COVID. I have ridden a 300%+ winner to breakeven.
12) Meanwhile, the company is still innovating while fighting off Topo Chico and Bubly. LaCroix maintains #1 market share in sparkling water with the introduction of Limoncello and Hibiscus flavors. There is hope they enter hard seltzer or clean energy.
13) By this time, the short interest is 7 million shares out of an 11.7 million share float. The company never caves on the shady short lawsuit and the plaintiffs capitulate: https://ir.nationalbeverage.com/static-files/921b1264-8d34-4859-ad6a-995f3443119e
14) I give the Caporella's all the credit in the world. They watched their net worth fall 70% and never caved. They are excellent stewards of capital and never blew shareholder money on a frivolous acquisition.
15) Entering late 2020, the company is printing record sales, profits and cash on the balance sheet. The stock has recovered to $85 by the end of the year.
16) Beginning in the middle of Jan '21, $FIZZ starts to ramp higher on no news. It joins the market wide short squeeze along with $GME and $AMC and spikes from $85 to $195. It was time to sell.
17) Even though I love the company and the product I had to exit my position into the short squeeze, although I will always keep 100 shares for posterity.
18) The final numbers were a buy price of $32.19 and a sell price of $147.37. Add $11.90 in dividends, $159.27. Total return of 394.85% or 4.95x. Cheers!
