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Shares of Monster Beverage (
) sink following an earnings report with "
" that misses on the top and bottom lines. While revenue rose briskly on a year-over-year comparison, it wasn't enough to satisfy the thirst of investors looking for even more explosive growth. The company also saw gross profit margin as a percentage of sales slip 100 bps Y/Y to 51.8% during the period. MNST
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I've been avid investor for over 30 years conducting my own research and selecting my own stocks.
They missed. And there will be a sell off. I urge anyone interested in this company to read the full transcript. One has to understand the full picture. During the growth of any company there are developments that affect performance. Bumps in the road if you will. You will see them in the report. Companies learn from these experiences and most often don't repeat them. As is the case here with expansion into international markets. The full transcript also mentions that they are not likely to see a repeat of increased raw material costs moving forward. And that any dip in the stock is buying opportunity for the company in terms of a buy back. The certainly have the cash.
Monster is still an excellent cash generating machine and their growth is still explosive.
The recent Apple quarterly report had a similar pull back and the result was truly a buying opportunity. Look at the chart for the past month.
Monsters sales and profit growth are still excellent in terms of the overall market and Monsters competitors. The company is still small and this kind of growth is highly likely to continue especially knowing the companies efforts to expand into foreign markets.
My perspective is long term. The companies performance and management are solid and the long term story is still in tact.
Aug 9, 2012. 08:55 AM
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