November 14, 2024
Top 10 Stock Monster Beverage Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Monster Beverage – Top 10 Stock in S&P Food & Beverage Index
Monster Beverage is listed as a top 10 stock on November 14, 2024 in the market index S&P US Food & Beverage because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 50 (high 50% performer), Obermatt assesses an overall buy recommendation for Monster Beverage on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Soft Drinks |
| Index | Human Rights, NASDAQ 100, NASDAQ, S&P US Consumer, S&P US Food & Beverage, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Monster Beverage Buy
| 360 METRICS | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 1 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock Monster Beverage are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Monster Beverage. The consolidated Sentiment Rank has a good rank of 61, which means that professional investors are more optimistic about the stock than for 61% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 96 or better than 96% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 1, meaning that the share price of Monster Beverage is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 47. ...read more
RECOMMENDATION: With a consolidated 360° View of 50, Monster Beverage is better positioned than 50% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 61) and safe financing practices (Safety Rank of 96), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Monster Beveragẹ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Monster Beverage positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock Monster Beverage is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Monster Beverage. Analyst Opinions are at a rank of 52 (better than 52% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 78, which means that currently, professional investors hold more stock in this company than in 78% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 72 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 72% of competitors). But Analyst Opinions Change has a below-average rank of 13, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Monster Beverage. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), Monster Beverage has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Monster Beverage Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 1 (worse than 99% compared with alternatives), Monster Beverage shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Monster Beverage. Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning Monster Beverage's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 11, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Monster Beverage. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 11 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 1, is a sell recommendation based on Monster Beverage's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Monster Beverage? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Monster Beverage? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Monster Beverage may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Monster Beverage Growth Momentum low
| GROWTH METRICS | November 14, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 84 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 47 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 15 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 41 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
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ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Monster Beverage shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Monster Beverage. While Sales Growth ranks at 84, professionals currently expect the company to grow more than 84% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 47, which means that, currently, professionals expect the company to grow its profits less than 53% of its competitors, and Capital Growth has a low rank of 15. Historic stock returns were also below average with a current Stock Returns rank of 41 which means that the stock returns have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Monster Beverage Debt Financing Safety very solid
| SAFETY METRICS | November 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 92 |
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| REFINANCING | ||||||||
| REFINANCING | 45 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2024, the company Monster Beverage has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Monster Beverage is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Monster Beverage. Leverage is at a rank of 92, meaning the company has a below-average debt-to-equity ratio. It has less debt than 92% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 45, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 55% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Monster Beverage has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Monster Beverage. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Monster Beverage Below-Average Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 1 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Monster Beverage (Soft Drinks, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Monster Beverage are low in value (priced high) with a consolidated Value Rank of 1 (worse than 99% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 96), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Monster Beverage's financial characteristics. As the company Monster Beverage's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 1) and low growth (Obermatt Growth Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 96) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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