After holiday interest in two drink companies...

Today was a shopping day, cleared the 10" of snow off the car window loaded up the family and went shopping...

Went to a Bed bath and Beyond (BBB) and first thing you notice when you walk in is all the Coffee Pods for sale, some of these were upwards of $80 bucks a box.  Good thing is they are still Green Mountain Coffee Roaster (GMCR) products...  Right next to these was a demonstration of the Israeli Company Sodastream's (SODA) product.  This is the product that will make almost any kind of soda you would want, of course you must buy the flavor packet and carbonation products. For those of you involved with Sharkwater you know we have taken an interest in GMCR and were recently trying to get a read on if SODA was going to be on our radar scope after the IPO... Fortunately we played both well, the question is now that they are both priced about the same what, if any, is the trade here.

I still like GMCR, it had some competition news and a class action law suit regarding its accounting issues that pulled it back the day we picked it up.  We are currently out of GMCR and looking to see what the best move is.  Being bullish on the equity we see the ATM calls a good place to start, there is some volitility with them so they are priced a little high.  There is some interest in the $40 calls over the next several months, but no insight into if they are probable sells or buys.  Not much in the put section.  Another trade would be a covered call since there is some added volitility, the Jan 11 35$ would return approx 20% plus the ~2/share.

I am not to impressed with SODA yet, the convenience of the pod is evident and useful on a daily basis even with the premium you pay for your single serve pod.  I first saw these when travelling on business several years ago now there everywhere.  This is in contrast to buying a case of your favorite soda and sticking it in the fridge or going to the soda machine or break room and paying for one when you want vice having to have the coffee every morning...  I would only stick to the options if you are looking to play this.  We are going to keep watching this one to see how well it performs in the U.S. as it is just breaking into the market here and we need to find out how well it is doing in Europe.

Happy trading...