Monster Beverage shares popped more than 2 percent in extended trading Thursday after the beverage company reported a 9 percent boost in sales from the same quarter last year.
Now, Monster hasn’t exactly quenched the thirst of investors lately, shares of the company are down 4 percent on the year, but is it about to turn a corner?
“I’m not a big fan of the stock,” said Auerbach Grayson’s Richard Ross. “You can see on a year-to-date basis a lot of volatility here. But for all the stir and drum we’ve really gone nowhere, down 3 percent and we’ve broken below the key 200-day moving average. “
According to Ross, the there’s one technical pattern that spells trouble for Monster—a complex head-and-shoulders, or a distributive-pattern comprising two smaller head and shoulders. “When we zoom out you can see while we’re clinging to key support at the neckline of that pattern.”
Ross advised that better support could be held at the stock’s150-week moving average, around $59 to $60 per share. “I would not own it right in here I don’t like the stock.”
Erin Gibbs of S&P Capital IQ, on the other hand, believes that Monster, despite being a consumer staple, is a growth company. “Long-term this company looks very good and is trading at relatively attractive evaluations. There’s also been a lot of scrutiny on these energy drinks that has really died down, the costs have gone down, the scrutiny has gone down. I see the worst case being maybe just a label being placed on their beverages. And they’ve had good growth going into international markets.”
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