Strong On High Volume: Monster Beverage (MNST)

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 strong 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 $110.0 million.
  • MNST has traded 368,404 shares today.
  • MNST is trading at 2.21 times the normal volume for the stock at this time of day.
  • MNST is trading at a new high 3.02% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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:

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 38.8. Currently there are 5 analysts that rate Monster Beverage a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Monster Beverage has been 1.8 million shares per day over the past 30 days. Monster Beverage has a market cap of $15.1 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.33 and a short float of 1.8% with 2.68 days to cover. Shares are up 32.5% year-to-date as of the close of trading on Friday.

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, 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:
  • MNST's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 8.9%. 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 3.03, which clearly demonstrates the ability to cover short-term cash needs.
  • MONSTER BEVERAGE CORP has improved earnings per share by 30.6% 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 $1.96 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $1.96).
  • 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 31.9% when compared to the same quarter one year prior, rising from $106.87 million to $141.00 million.
  • The gross profit margin for MONSTER BEVERAGE CORP is rather high; currently it is at 56.15%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.51% is above that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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