Monster Beverage Corp. (MNST) has been on a roller coaster ride. This is mainly news driven from the questions:
Is Monster a health risk?
Is Monster an Einhorn short target?
Is the government stepping in?
Fines in Chicago for peddling it?!
Heck, just search for the term "energy drink" and you'll see article after article demonizing the stuff.
So now the one-time great momentum stock is starting to see the stock price go down and short interest going up. But I argue now is a great time to buy Monster amidst all of the negativity. If you've heard the term "blood in the streets," I am applying that to Monster.
So let's put aside the bad and focus on why I'm looking at the good. First, some quick financials. Revenue just keeps going up quarter after quarter. It doesn't show much sign of slowing. If you replaced the company name "Monster Beverage Corporation" with "Happy Fun Time Products" or something generic, investors might be lining up on the financials alone.
But obviously we can't do that and Monster is a target of the nay-sayers. Monster can even try to refute it but not many seem to listen. But energy drinks aren't alone, historically. All beverages that "the man" doesn't understand goes under scrutiny:
I'm not saying Monster is a health drink and should be freely chugged with grain alcohol. But I am saying Monster is a stock that can be invested in and SHOULD be invested in. It has the momentum numbers still going along, it has a highly desirable product that isn't slowing down in sales. And if you look historically at other "energy" beverages, Coca-Cola (NYSE:KO), Pepsi Co. (NYSE:PEP), Green Mountain Coffee Roasters (GMCR) and Starbucks (SBUX) are all doing quite well these days.
It takes time for an unknowing, all-powerful group of suits that are "looking out for our children" to get the answers or regulation that they are satisfied with (or lobby money, but I won't go there). Until then, fear will push Monster down while the smart money puts money in, knowing that there seems to be a bit of blood in the streets. And once good news starts trumping bad, the stock will be the darling of Wall Street once more. But the trick is to get in before the roller coaster goes up again.
Disclosure: I am long MNST. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.