If Monster Beverage Corporation's (NASDAQ: MNST) performance is any indication, top energy drink stocks seem to be bouncing back in the wake of the eyebrow-raising profit-taking and market movements that happened in "sell in May."
While the whole month of May was slightly volatile for Monster as reflected by its price chart for the said month, it picked up quickly towards the end of the month.
The company's shares closed at $66.92 on May 2, skyrocketed to 70.10 on May 12, then inched up by .45 percent to $70.55 on May 16. Its shares rode a downward trend by May 28 at $68.47 then rebounded on Friday to $69.38, a 0.52 percent increase from its previous close. Analysts expect Monster's pricing to reach $77.09 this year based on latest market data.
The shares of Pepsico, Inc. (NYSE: PEP), maker of Amp energy drink, are on an uptick, starting at 85.52 in May 2, then edging up to 86.54 on May 16. Its shares dipped back to 85.53 on May 23, then peaked at 88.33 by May 30, up by 0.68 percent from its previous close.
Relentless energy drink maker The Coca-Cola Company (NYSE: KO) also ended May on a positive note, albeit slightly lower by 0.50 from its May 2 close. KO reached 41.11 on May 13 before it plunged swiftly two days after to 40.52. The growth stock has since recovered though, closing May at 40.90.
Significant improvements are yet to be seen from micro-cap energy drink manufacturers such as Jones Soda Co. (OTCMKTS: JSDA) and Reeds, Inc. (OTCMKTS: REED), which both sell premium craft sodas and natural energy drinks in the U.S. and Canada.
What about Red Bull?
Monster Beverage Corporation continues to increase its share in the energy drink market in each global region, based on a report from Citi analyst Wendy Nicholson. Nicholson added Monster's market share has steadily increased from 2009, while Red Bull is heading the other way.
Red Bull still leads the industry as Nicholson found. However, as Monster's share of the market grows, Red Bull's is on a steady decline as competition gets stiffer. It has been since 2009, during the global financial crunch, and as new players in the market-PepsiCo, Inc. and The Coca-Cola Company-released energy drink brands Amp and Relentless respectively, Business Monitor reported in 2010.
Price competition also continues to pose a threat to Austria-based Red Bull- which is still run as a privately-held company-as new entrants in the market introduce products that offer more value for money. For example, Coca-Cola's Relentless sells at a same price point as Red Bull although it is definitely bigger in size than Red Bull. Additionally, private label companies sell products at 50 percent less.
Another player that continues to threaten Red Bull's market share is growing competition from smaller energy drink companies offering natural and organic energy drink choices (i.e. alternative beverage). Promising brands making up this segment include Pacific Shores Holdings, Inc.'s (OTC: PSHR) Energy X, and private-label offerings such as Viso, Scheckters, FRS, and Little Big Shot.