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A Gusher At Saratoga Springs?

Inside Wall Street


In the richly competitive bottled-water business dominated by Perrier Group and Evian Waters, what chance does a tiny company have? Quite a lot, especially if it's Saratoga Spring Water, a well-known name on the East Coast for over 100 years. Some investors are buying into the company, which went public in June at 5 a share and two days later sprang to 8 3/4. The stock is now at 7 1/8, but these pros believe they have a big winner.

Saratoga is headed by Robin Prever, a 33-year-old former portfolio manager at Gabelli Asset Management, who formed a group last year to buy Saratoga from Evian Waters of France.

"I'm a Gabelli-trained value investor who knows value when I see it," says Prever, now Saratoga's President and CEO. Evian acquired Saratoga from Anheuser-Busch for $8 million in 1988, put in an additional $3 million, and then closed it down in May, 1991, when it believed the U.S. sparkling-water market had tanked. But in April, 1992, Evian, a unit of the French conglomerate BSN, sold the shuttered company to the Prever group for $2.3 million.

The free-flowing springs on the company's property in Saratoga, N.Y., with its modern production and bottling facilities, are worth $10 million, notes Prever. And this company, she predicts, will dominate the $40 million premium bottled-water market in the Connecticut, New York, and New Jersey area in three years.

One analyst sees revenues of $4 million in 1994 and $6 million in 1995, vs. 1993's $3 million. After a modest loss this year, Saratoga will be in the black by 1994, he figures. Thereafter, earnings could explode, he says, partly because of acquisitions Prever has lined up. Mario Gabelli says he won't be surprised if Saratoga becomes a big winner in the industry. GENE G. MARCIAL

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