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FIZZ - this corrective wave ( 4 ) down is deeper than normal but setup is good at least for a bounce
National Beverage Corp makes a variety of nonalcoholic beverages. It primarily distributes its products in the United States. Its largest brand is LaCroix Sparkling Water.
We see a clean long-term impulsive structure on the chart below. It topped in wave ( 3 ) up at 126.92 in September 2017. Then it played a textbook wave ( 4 ) down that retraced 76.4% of wave ( 3 ) up. On the one hand this pullback is much deeper than normal 41.4%-44.1%-50% retracement normally seen for wave ( 4 ) down. On the other hand, it stopped well over its critical support at the low of wave ( B ) of ( 3 ) ( at 33.24 ). Even if this drop is something more than a corrective wave ( 4 ) down we may get a tradeable pullback from this low. Last Friday it spiked by 7%. I will keep watching its micro count for a good entry. Stay tuned!
FIZZ - Daily chart updated on 8-3-2019
Financial Strength
I like profitable companies with solid businesses and FIZZ is one of them. It has Net Margin of 13.9%. Very high Return on Capital of 125% confirms efficiency of the management team in reinvesting profit. That means they invest in expansion of profitable business. Another good sign is zero debt. At the same time the stock is not cheap. It is traded at 21.5 Price to Free Cash Flow. We like stocks of profitable companies that generate Free Cash Flow that valued at less than x12 FCF. In this case I would consider this setup as good for a short term bounce.
Operating Margin
17.8
Net
Margin
13.9
Return on Capital
125
Price-to-Free-Cash-Flow
21.5
No Debt
Dividend Yield
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