Cott: Headline Miss Masks Underlying Improvement; 100+% Upside
- Headline EPS miss masks several positive developments during the second quarter. The business has stabilized after a tough couple of years and is poised for growth.
- Cott trades at less than 6x my estimate of 2015 free cash flow.
- The company will increase returns to shareholders via dividends and buybacks.
- A return to rationality by Coke & Pepsi in the North American soda market could boost Cott's EBITDA by 25%.
- As the market appreciates the improvement in Cott's business, the author expect shares to appreciate 130+%.