(Reuters) A carbonated drinks manufacturer is always in bubble territory.
But after a 1,450% share price rise since a late-2014 market debut, arguably none is looking as frothy as upmarket tonic-water-maker Fevertree.
Its shares have started to deflate, but only against a backdrop of general angst over asset valuations, with global equities and bonds at or close to record peaks and cryptocurrency Bitcoin up almost 20-fold this year alone.
A move by Schweppes to compete in the premium drinks segment is behind some of the recent weakness, but fund managers do not expect this to have any sizeable impact on Fevertree’s growth.
Nor do they see any let-up in what has become the Fevertree standard – beating analysts’ earnings forecasts.
Richard Watts, who runs the £3.2bn Old Mutual UK Mid Cap Fund and is the biggest institutional shareholder of Fevertree, topped up his holdings in the company in the last few weeks.
“We think there are significant amounts of upside left in the shares,” he said.
He said Fevertree’s sales momentum is exceptionally strong.
Britain is Fevertree’s largest market. RBC Capital Markets put its contribution to the company’s organic revenue growth at more than 50% since 2015, accelerating to more than 60% since the second half of 2016.
The performance, helped by a boom in craft gin sales, shows no sign of abating. UK sales increased more than 100% in the first half of 2017 – and against a robust prior year level.
Watts said the international business is growing at a very healthy rate, too.
Fevertree is beefing up its overseas presence. It recently opened a US office and appointed a CEO for its business there.