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 Monster Beverage ( MNST) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) 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 $55.1 million.
- MNST has traded 1.0 million shares today.
- MNST traded in a range 210.2% of the normal price range with a price range of $2.68.
- MNST traded below its daily resistance level (quality: 73 days, meaning that the stock is crossing a resistance level set by the last 73 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower. EXCLUSIVE OFFER: Get the inside scoop on opportunities in MNST with the Ticky from Trade-Ideas. See the FREE profile for MNST NOW at Trade-Ideas 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. Currently there are 4 analysts that rate Monster Beverage a buy, 1 analyst rates it a sell, and 2 rate it a hold. The average volume for Monster Beverage has been 1.5 million shares per day over the past 30 days. Monster Beverage has a market cap of $9.6 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of -0.36 and a short float of 4.1% with 5.90 days to cover. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. 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, notable return on equity, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- MNST's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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. To add to this, MNST has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Beverages industry and the overall market, MONSTER BEVERAGE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- MONSTER BEVERAGE CORP has improved earnings per share by 5.1% 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 $1.86 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $1.86).
- The gross profit margin for MONSTER BEVERAGE CORP is rather high; currently it is at 54.13%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MNST's net profit margin of 16.93% significantly trails the industry average.
- You can view the full Monster Beverage Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.