Monster Stock Takes a Beating Ahead of Earnings but Still Tops One List
Update: Monster Beverage stock is sinking as much as 11% after its earnings and revenue missed analyst estimates in a release after the bell. The company reported earnings per share of 47 cents, which fell below consensus of 55 cents, while revenue of $542 million missed expectations of around $578 million. As expenses jumped, gross margin shrank -- from 52.7% to 50.5%.
In a statement, CEO Rodney C. Saks said, "While the Company achieved less robust growth in sales dollars than in previous quarters, gross sales for the Company in October 2012 increased by approximately 28 percent over the same month last year."
Monster Beverage (MNST) stock has been less-than-energized in the past few months, as scrutiny into the safety of its energy-drink products has intensified.
Back in August we took a look at the stock just as The Wall Street Journal reported New York State Attorney General Eric Schneiderman issued subpoenas to Monster and fellow energy-drink manufacturers PepsiCo (PEP) and Living Essentials, LLC. That investigation is focused on whether the industry is misleading consumers about the ingredients and health benefits of these drinks, which are seen as supplements rather than strictly as food/beverage items, and therefore have not been regulated by the FDA.
In October another Monster-focused investigation was reported, this one with "death" in the headlines (and "death" related to a company's product can certainly be a stock killer). As mentioned in our August Monster profile, a 14-year-old Maryland girl was reported to have died back in March after drinking two Monster beverages in 24 hours. It was also noted that she had a genetic heart problem that could have been the true culprit in the tragedy.
Deaths Linked to Monster
But late October saw FDA reports citing the possibility that a total of five people had died over the past three years after drinking Monster products. The reports were linked to a lawsuit filed by the mother of the deceased Maryland girl, which charges Monster did not properly warn consumers about the risks of its drinks. While no proof of a link between the beverages and the deaths exists, and Monster itself denied knowledge of them, the day the reports were unveiled found the stock sinking 14%. Goldman (GS) subsequently removed MNST from its "conviction buy" list. And while shares are currently down just 1.5% from that day, they have plunged a good 21% in the past month and are down a whopping 24% -- to $44 and change -- since our last look at Monster stock, when it held the title as #1 stock gainer on the S&P 500 in the past 12 years.
Today, ahead of earnings that should give us a better look at a company that still leads the energy-drink pack -- raking in $1.9 billion in sales of its psychedelically packaged drinks last year despite increased competition from companies ranging from Coca-Cola (COKE) to Target (TGT) -- the stock still finds itself at #1, having gained a still eye-popping 16,301% since November 7 of 2000. This is down from the 22,127% rise it had seen in August but still mighty impressive, beating the likes of Apple (AAPL), no. 2 at a distant 5,369%, and Coach (COH), up 1,845% according to FactSet data.
Below is the full list of top price gainers since Nov. 7 of 2000. Stay tuned for Monster earnings after the bell.
Monster (MNST): 16,390%
Apple (AAPL): 5,369%
Urban Outfitters (URBN): 3,580%
Southwestern Energy Co (SWN): 3,554%
FLIR Systems Inc. (FLIR): 2,867%
Priceline.com (PCLN): 2,410%
Range Resources Corp. (RRC): 2,167%
Intuitive Surgical Inc. (ISRG): 1,991%
Coach Inc. (COH): 1,845%
Cognizant Technology Solutions Corp. (CTSH): 1,706%
