Investment Thesis
Monster Beverage is the largest market player in the energy drink industry. It also has access to one of the best supply chains in the world thanks to its partnership with Coca-Cola. In the short term, Monster is looking to continue to stay agile in developing new flavors and acquiring other brands which are driving market excitement. Over the long term, Monster looks to strengthen their partnerships with Coca-Cola as well as regional entities to diversify their product mix.
Company Description
Monster Beverage Corporation operates as a holding company. The company, through its subsidiaries, markets and distributes energy drinks worldwide for a number of customers including athletics performance and general energy needs.
Some Key Metrics
Metric | Data Point |
|---|---|
Return on Invested Capital (5Yr Avg.) | 26.01% |
5 Yr. CAGR of EPS Growth | 15.1% |
FCF Yield | 1.9% |
Net Debt/EBITDA | -1.46 |
Durability of Business
Monster has the largest market share in the energy drink market, and their existing suite of drinks has loyal followers which continue to return to the brand. Monster also utilizes strong marketing to ensure that their brand continues to be at the forefront of customer's minds.
Monster typically sees growth through the release of new products and flavors for their existing suite of energy drinks. In addition to this organic growth Monster will often actively acquire firms for flavor and new products to bolster their existing selection.
Management:
Amazing management team with Co-CEO's that have been with the company since the beginning. They have made strategic decisions to expand their market share and increase their presence internationally while achieving one of the best return on invested capital in corporate America.
Research by: Kevin Hurley, Drake Cody, Clark Agnew
Portfolio Manager: Raymond Kanyo, CFA