Trade-Ideas LLC identified

Monster Beverage

(

MNST

) as a weak on high relative volume 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 $170.7 million.
  • MNST has traded 465,067 shares today.
  • MNST is trading at 9.86 times the normal volume for the stock at this time of day.
  • MNST is trading at a new low 4.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on MNST:

TheStreet Recommends

Monster Beverage Corporation, through its subsidiaries, develops, markets, sells, and distributes alternative beverage category beverages in the United States and internationally. MNST has a PE ratio of 48. Currently there are 8 analysts that rate Monster Beverage a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Monster Beverage has been 1.2 million shares per day over the past 30 days. Monster Beverage has a market cap of $28.0 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.01 and a short float of 1.7% with 2.20 days to cover. Shares are down 7.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Monster Beverage as a

buy

. 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, expanding profit margins, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 19.0%. 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 6.58, which clearly demonstrates the ability to cover short-term cash needs.
  • MONSTER BEVERAGE CORP has improved earnings per share by 20.0% 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 ($3.08 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 43.6% when compared to the same quarter one year prior, rising from $121.60 million to $174.57 million.
  • The gross profit margin for MONSTER BEVERAGE CORP is rather high; currently it is at 62.65%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.07% significantly outperformed against the industry average.

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