11/5/24 - $celh - No edge. Pains me to sit this Q out.
11/5/24 :: VROCKSTAR :: 
CELH
No edge. Pains me to sit this out.
- trading this thing around and following the FUD all over social media has me confused. i'll admit.
- on one hand, these things are flying off the shelves and scanner data looks great (that's sell thru!)
- on the other hand, i've been seeing a lot of discounting
- on the other OTHER hand (yes i have three hands), clearly
PEP is trying to get thru over-ordered inventory esp into a non-summer season in north america which might inform the sell thru
- google trends is waning, though this isn't the type of purchase that typically shows up as being super high signal on google trends... when have you googled "where to get a Coke" as an example, but nonetheless it's part of my due diligence mosaic
- now the latest we hear from mgmt is they're looking to build own capacity. honestly, that's more of a positive than a negative, given there's clearly enough reason to start pulling this inhouse and not lettingPEP jerk the brand to their whim
- on the other hand, this will cost $... capex dollars... at a time whenPEP is also probably not going to re-stock big (or go smaller) into the winter time period... and where Int'l launch while i'm sure it's going well (let's be honest those flavors are rockin')... is probably also low margin.
- so you're facing a quarter where there's likely to be a lot of 'splaining and taking a position tuesday night into elections is also whack enough
- let's say margins come in weak, they say "growth step down b/c pep means this is the bottom"... in a lot of ways, you buy that dip if it dips, but it *will* dip, because the market is hating stuff that's not just beating and raising. in fact it's only shipping things higher that are crushing and raising. this is very hard for me to believe with celh.
- and valuation at high 20s PE while in a LT context for this brand is NOT expensive IMVHO and LSD fcf yield is "good enough", it's just too much risk into this print.
- on the person fronts, as those of you who follow me know, i've had some nice wins lately w/ the
GDLC then 
NXT crush, after some big wins earlier this year too. I LIKE TO GO BIG. often when i'm tip toeing around is where i lose focus, and i trade poorly.
- so a bit of this move is my own situation heading into election night, feeling unclear what's happening here, having not too much confidence in mgmt's ability to communicate even if nothing's wrong but the quarter's meh.
- if this ships, it ships. after the result... who knows. maybe i jump back on if/when this thing is up 10%. i doubt it.
- the options chain is also fairly locked up in the low 30s here so a move beyond $33-34 would take some real surprise (good surprise).
- my best guess is this thing trades lower. probably not in the low 20s like the bears are expecting, probably not even in the mid 20s, but 26-27-28 not out of the question.
- let's see. alas, idk the future, so i go with high conviction bets. and this one leaves me so confused into the print in such a weird risk week for the US... that i'd rather act with high cash balance (nearly 45% of my stack RN! and i'm long calls on a lot of things... will write later... to fill up my exposure)
lmk how you see it. i'd love to gain more clarity on this b/c i would also love to hold it long term near the lows
V
CELHNo edge. Pains me to sit this out.
- trading this thing around and following the FUD all over social media has me confused. i'll admit.
- on one hand, these things are flying off the shelves and scanner data looks great (that's sell thru!)
- on the other hand, i've been seeing a lot of discounting
- on the other OTHER hand (yes i have three hands), clearly
PEP is trying to get thru over-ordered inventory esp into a non-summer season in north america which might inform the sell thru- google trends is waning, though this isn't the type of purchase that typically shows up as being super high signal on google trends... when have you googled "where to get a Coke" as an example, but nonetheless it's part of my due diligence mosaic
- now the latest we hear from mgmt is they're looking to build own capacity. honestly, that's more of a positive than a negative, given there's clearly enough reason to start pulling this inhouse and not letting
PEP jerk the brand to their whim- on the other hand, this will cost $... capex dollars... at a time when
PEP is also probably not going to re-stock big (or go smaller) into the winter time period... and where Int'l launch while i'm sure it's going well (let's be honest those flavors are rockin')... is probably also low margin.- so you're facing a quarter where there's likely to be a lot of 'splaining and taking a position tuesday night into elections is also whack enough
- let's say margins come in weak, they say "growth step down b/c pep means this is the bottom"... in a lot of ways, you buy that dip if it dips, but it *will* dip, because the market is hating stuff that's not just beating and raising. in fact it's only shipping things higher that are crushing and raising. this is very hard for me to believe with celh.
- and valuation at high 20s PE while in a LT context for this brand is NOT expensive IMVHO and LSD fcf yield is "good enough", it's just too much risk into this print.
- on the person fronts, as those of you who follow me know, i've had some nice wins lately w/ the
GDLC then NXT crush, after some big wins earlier this year too. I LIKE TO GO BIG. often when i'm tip toeing around is where i lose focus, and i trade poorly.- so a bit of this move is my own situation heading into election night, feeling unclear what's happening here, having not too much confidence in mgmt's ability to communicate even if nothing's wrong but the quarter's meh.
- if this ships, it ships. after the result... who knows. maybe i jump back on if/when this thing is up 10%. i doubt it.
- the options chain is also fairly locked up in the low 30s here so a move beyond $33-34 would take some real surprise (good surprise).
- my best guess is this thing trades lower. probably not in the low 20s like the bears are expecting, probably not even in the mid 20s, but 26-27-28 not out of the question.
- let's see. alas, idk the future, so i go with high conviction bets. and this one leaves me so confused into the print in such a weird risk week for the US... that i'd rather act with high cash balance (nearly 45% of my stack RN! and i'm long calls on a lot of things... will write later... to fill up my exposure)
lmk how you see it. i'd love to gain more clarity on this b/c i would also love to hold it long term near the lows
V
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