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Business, Finance, Occupation & Industry

Analysts Debate: Is Monster Beverage Still a Top Stock?

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By Alex Planes, Sean Williams, and Travis Hoium, The Motley Fool

MNST PE Ratio TTM Chart

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The Motley Fool has been making successful stock picks for many years, but we don’t always agree on what a great stock looks like. That’s what makes us “motley,” and it’s one of our core values. We can disagree respectfully, as we often do. Investors do better when they share their knowledge.

In that spirit, we three Fools have banded together to find the market‘s best and worst stocks, which we’ll rate on The Motley Fool’s CAPS system as outperformers or underperformers. We’ll be accountable for every pick based on the sum of our knowledge and the balance of our decisions. Today, we’ll be discussing Monster Beverage , the largest publicly traded energy drink purveyor in the world.

Monster by the numbers
Here’s a quick snapshot of the company’s most important numbers:

Statistic

Result (TTM or Most Recent Available)

Market Cap 

$8.1 billion

P/E and forward P/E

26.2 and 16.4

Revenue

$2.1 billion

Operating margin

26.7%

Net income

$340 million

Free cash flow

$238 million

Cash and investments

$320 million

Sales by customer type 
  • Full-service distributors: 63%
  • Club stores, drugstores, mass merchandisers: 9%
  • International: 22%
  • Grocery, specialty chains, wholesalers: 4%
  • Other: 2%

Case sales (192-ounce cases)
  • 202.9 million

U.S. alternative* beverage market share

4.7%

Key competitors
  • Coca-Cola
  • Pepsi
  • Dr Pepper Snapple
  • Starbucks
  • Red Bull

Sources: Morningstar, corporate reports, Net Applications, and press releases.
* Includes ready-to-drink iced tea, lemonade, juice and fruit beverages, dairy and coffee drinks, sports drinks,” natural” sodas, flavored sparkling beverages, single-serve water, and energy drinks.

Alex’s take
I’ve had my eye on Monster for some time, but I found it to be too pricey an opportunity last year as its P/E soared toward bubbly territory:

Source: MNST P/E Ratio TTM data by YCharts.

However, now that investors have backed away — a flight that began, contrary to what you may think, well before the legal challenges over several purported deaths — Monster is starting to look a bit more palatable. With the exception of a brief period after the financial crash and in early 2010, Monster’s valuation hasn’t been this low in a decade. Is this an opportunity or the warning sign of a pending sales slowdown? While Monster didn’t offer up any annual guidance for its 2013 fiscal year, we can extrapolate its growth rate from analyst estimates:

Year 

Revenue Growth*

Net Income Growth*

2009

11%

94%

2010

14%

1%

2011

31%

35%

2012

21%

19%

2013 (estimated )

13%

22%

Sources: Morningstar, Yahoo! Finance. * Year-over-year growth rate.

Monster can’t keep up its monster (pardon the pun) growth rates forever. The energy drink segment is reaching maturity in the American market, according to a Nielsen report on a 13-week sales period that ended in mid-February. During this period, …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

These Stocks Missed the Dow's Record Run

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By Dan Caplinger, The Motley Fool

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It’s not every day that the Dow Jones Industrials set a new all-time high. For the first time in more than five years, the Dow set a new record, rising more than 125 points to close at 14,254, well above its former closing record of 14,164. With that milestone behind them, investors will now turn their attention to the S&P 500, which is now less than 2% below its closing record high of 1,565.

Today’s rally was broad-based, with only two losing stocks in the Dow. One was Coca-Cola , which fell 0.4%. Fool contributor Alex Planes suggested earlier today that news from rival Dr Pepper Snapple might have sent Coke’s shares lower, but the other issue Coca-Cola faces is simply that with slow growth and defensive characteristics, the stock isn’t a favored place for investors during big bull markets like we’ve seen lately. The other Dow loser was Merck, which fell 0.2%.

Elsewhere, Impax Labs fell more than 25% when an FDA inspection of a California manufacturing facility found a dozen problems, three of which had already been cited in a previous 2011 warning letter. Despite the unquestionable promise of Parkinson’s drug Rytary, Impax needs to get its internal operations in better shape to comply with regulatory requirements and bring the drug through the approval process to market.

Finally, SandRidge Energy dropped 4.5%, with an even bigger 11% decline for its SandRidge Mississippian Trust I . Despite impressive dividend yields, SandRidge’s trusts have fallen short of distribution targets even as production has ramped up, and that’s weighing on the parent entity as well. Still, if rock-bottom prices for natural gas ever recover, SandRidge has positioned itself to post impressive gains in the future.

Coke’s drop today isn’t the first setback investors have faced, as the soft-drink giant faces some new threats to its continued market dominance. We’ve recently compiled a premium research report containing everything you need to know about Coca-Cola. If you own or are thinking about buying shares in the company, you’ll want to click here now and get started!

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Dan Caplinger”, …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dow Pops the Champagne

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By Jeremy Bowman, The Motley Fool

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As you’ve probably heard by now, the Dow Jones Industrial Average broke its all-time record today, and the blue chips did it with a bang, gaining 126 points, or 0.9%, to finish at 14,254. The Dow shattered both the closing record of 14,164 and its all-time intraday high of 14.198, which it eclipsed just after opening. The index reached an intraday high of 14,286 today.

Momentum out of Europe pushed the Dow higher early in the morning as the German DAX gained more than 2.3%, and European stocks set a high-water mark of their own, reaching a level not seen in four and a half years. Retail sales in Europe were stronger than expected, and the continuing optimism in American financial markets helped drive stocks higher across the Atlantic. More good news came in the form of a strong ISM services report, whose index hit 56 in February, a slight gain over January’s 55.2 reading, and better than the market‘s expectations of 55.2.

Nearly every stock on the blue chips gained today. Boeing was one of the biggest movers, climbing 2% to a new 52-week high as the aircraft maker scored a $1 billion order from Cathay Pacific for three 747-8 Freighter airplanes. Still, the company was struggling with problems from its Dreamliner jets as the Polish airline LOT demanded compensation for the grounded jets, and the British company Thomson Airways said it would reimburse customers who had paid to fly the Dreamliner starting in May. Shares were down nearly 1% after hours, however, as the FAA still appears to be several steps from approving the 787s for flight again.

Coca-Cola was the Dow’s biggest loser of the day, falling 0.4%, apparently in response to news that competition from Dr Pepper Snapple may be heating up as that company acquired the rights to distribute Snapple in Asia and other beverages in Australia from Mondelez.

Will the Dow move higher?
Despite concerns about sequestration, the European debt crisis, and China‘s slowing growth, there are plenty of reasons to believe in the bull market. Treasury yields are still incredibly low, meaning there’s a lot of money potentially waiting to get back into equities, and corporate profits continue to improve with housing and employment numbers promising a steady recovery. With the Feburary employment report due out Friday, strong jobs numbers could fuel another rally before week’s end.

If you’re looking for some long-term investing ideas, check out the Fool’s special report: “The 3 Dow Stocks Dividend Investors Need.” It’s absolutely free, so just click here and get your copy today.

The article Dow Pops the Champagne originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dr Pepper Snapple Reacquires Asia-Pacific Distribution Rights From Mondelez

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By Eric Volkman, The Motley Fool

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Dr Pepper Snapple has agreed to a deal with Mondelez International to reacquire distribution rights for several brands in certain Asia-Pacific markets.

The deal chiefly concerns the Snapple line of beverages, which Dr Pepper Snapple will have the right to distribute in Australia, Malaysia, Singapore, China, Hong Kong, Japan, and South Korea. The company will also hold such rights for Mott’s, Mr & Mrs T, Clamato, Mistic, Holland House, and Yoo-hoo in Australia.

In the press release announcing the news, Dr Pepper Snapple didn’t disclose the terms of the agreement. It added that it “does not anticipate that the acquisition will have any material effect on its 2013 financial results.”

The article Dr Pepper Snapple Reacquires Asia-Pacific Distribution Rights From Mondelez originally appeared on Fool.com.

Fool contributor Eric Volkman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance