Monster Beverage: Momentum Brewing, But Shares Are Fairly Priced

Excerpt

The following is a 250-word excerpt from my full article on Seeking Alpha: A crowdsourced financial market content service where investors can share ideas, discuss news, and make informed investment decisions. To view the full article without a paywall, please click on the link below:

https://seekingalpha.com/article/4820666?gt=f5cdb280b6c9863b

Summary

• I give Monster Beverage Corporation a hold rating.

• The company has a solid balance sheet, with an equity to debt ratio of 82-18 and enough cash on hand to pay off all liabilities.

• Monster Beverage's Peter Lynch earnings line indicates the stock's value to be at $59.43, meaning the stock is currently trading at around 11.36% above its earnings line.

• Monster had record earnings for Q2, with excellent July sales and momentum for Q3; but the company did not purchase shares in Q2, meaning they are exercising caution for Q3.

• The company has high quality earnings, and my discounted cash flow model indicates an intrinsic value of $64.38 per share, meaning the stock is trading 2.76% above its intrinsic value.

A Personal Anecdote

I've been wanting to do analysis on Monster for quite some time, mostly because I drink a lot of Monster Energy, specifically the original green version. I am quite the caffeine fiend, and the kick that I get after drinking 160mg worth of caffeine always hits the spot if I'm not in the mood for coffee. And I'll be honest: Until I opened up the company's latest 10-K, I had no idea that Monster had such a deep lineup of products. So, let's break down how the company makes their money…