Stock (Symbol) |
Monster Beverage (MNST) |
Stock Price |
$147 |
Sector |
| Food & Necessities |
Data is as of |
| November 16, 2015 |
Expected to Report |
| N/A |
Company Description |
 Monster Beverage Corporation is a holding company. The Company develop, market, sell and distribute alternative beverage category beverages under the brand names of Monster Energy, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, X-Presso Monster, Muscle Monster, Punch Monster, Hansen’s, Hansen’s Natural Cane Soda, Junior Juice, Blue Sky, Hubert’s, Worx Energy and Peace Tea. The company has two segments, Direct Store Delivery (DSD), whose principal products comprise energy drinks, and Warehouse (Warehouse), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily direct to retailers. |
Sharek’s Take |
 Monster Beverage (MNST) is expanding into Russia this year and China in 2016. These moves were helped made possible by Coca-Cola which made Monster its exclusive energy play while offering MNST its worldwide distribution network to sell its drinks. Monster had gotten only 1/4 of its sales abroad, and now should be able to double that in the coming years. I was recently in Hong Kong and Taiwan and didn’t see any Monster drinks there at all. Although the news of a bigger market should be a big boost to sales, analysts predict just a 27% jump in profits in 2016. With MNST selling for 37 times earnings, some of the good news may be priced into the stock, so I am waiting for a pullback to invest at a lower level. MNST also has $15 per share in cash, and in September issued a $500 million stock buyback program, which is 2% of shares. |
One Year Chart |
 Last qtr MNST sold for 48x earnings, now it sells for 37x. Still, my Fair Value is 33x earnings, so the stock’s still a little high now. 2QtrsAgo the company had disruptions with its distribution as it shifted to Coke. Last qtr Monster had 24% profit growth on a 19% gain in sales. It beat by just a penny, and annual profit estimates fell slightly, which to me signals the stock’s not timely right now, so I will wait. Qtrly profit estimates for the next 4 qtrs are +13%, +31%, +29% and +25% which are solid. |
Fair Value |
 My Fair Value on MNST is 33x earnings, which implies a $129 stock price, or 12% lower than it when this data was compiled mid-November. So basically I’m waiting to get in on a pullback. |
Bottom Line |
 Monster Beverage has been a has loads of growth opportunity overseas, and I feel the company will double sales in a few years. The only issue I have is some of the good news is already priced into the stock, and I would like to get in on a pullback. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
