Monster Beverage (MNST) On Momo Momentum Watch Today
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Monster Beverage as such a stock due to the following factors:
- MNST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $253.5 million.
- MNST has a PE ratio of 49.1.
- MNST is currently in the upper 30% of its 1-year range.
- MNST is in the upper 25% of its 20-day range.
- MNST is in the upper 35% of its 5-day range.
- MNST is currently trading above yesterday's high.
- MNST has experienced a gap between today's open and yesterday's close of 1%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on MNST:
Monster Beverage Corporation, through its subsidiaries, develops, markets, sells, and distributes alternative beverage category beverages in the United States and internationally. It operates in two segments, Direct Store Delivery and Warehouse. MNST has a PE ratio of 49.1. Currently there are 6 analysts that rate Monster Beverage a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Monster Beverage has been 1.1 million shares per day over the past 30 days. Monster Beverage has a market cap of $23.1 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.61 and a short float of 1.3% with 1.26 days to cover. Shares are up 25.5% year-to-date as of the close of trading on Wednesday.
Analysis:
rates Monster Beverage as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 12.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MNST has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.03, which clearly demonstrates the ability to cover short-term cash needs.
- MONSTER BEVERAGE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MONSTER BEVERAGE CORP increased its bottom line by earning $2.78 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($3.34 versus $2.78).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 64.7% when compared to the same quarter one year prior, rising from $76.11 million to $125.33 million.
- The gross profit margin for MONSTER BEVERAGE CORP is rather high; currently it is at 55.87%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.69% is above that of the industry average.
- You can view the full Monster Beverage Ratings Report.
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