Wednesday 24 January 2018 ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares

I'm Still Not Getting Busy with the Fizzy

By Malcolm Stacey | Friday 21 April 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Tasters. In the past I’ve commended Britvic (BVIC) to your further study, though I don’t hold the shares myself. If I did, I might be tempted to sell. This is not because the shares are doing badly. They are not. Indeed, since January they are up by a fifth.

The brands are strong, including Robinsons, Tango and J20. My kids ask for J20 every time we go near a bar.

But there is a bad press for sugary drinks. I don’t think Britvic is particularly sugary in this respect, but people may still be put off buying its products if they think, rightly or wrongly, that they might make them fat.

There’s also going to be a sugar tax in this country. That might produce another headwind. Though last time I looked the tax was being held back until April 2018 to give companies like Coca Cola and Britvic time to reduce sugar content.

The big bank Berenberg is not recommending you sell Britvic shares, but it has downgraded the stock from buy to hold. The bank points to a strong performance for Fruit Shoots in the USA. But it isn’t sure that the company is set to fly.

As you might expect, Britvic is a big player abroad and once again the weak pound should boost sterling revenues. But will it be enough to rocket the share price?

The company has a great record since it was listed in 2005. It’s strong and run by experienced managers. But I look for enterprises that are likely to zoom ahead with new ideas and increasing demand, not firmly established ones that may tread water as far as sales go. In other words, the shares seem safer than most, but not exciting.

By the way, we do sell J20 and Tango in the Punter’s Return.

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