Steve Mandel Boosts Monster Energy

GuruFocus.com
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- By Kyle Ferguson

Steve Mandel (Trades, Portfolio) nearly tripled his stake in Monster Beverage Corp. (MNST)in the second quarter, buying 3,027,014 shares at an average price of $144.54. The trade had a 2.24% impact on Mandel's portfolio, he now owns 4,141,575 shares of the company.


Monster Beverage Corp. was incorporated in Delaware on April 25, 1990 and was previously known as Hansen Natural Corporation. The company, through its subsidiaries, markets and distributes energy drinks. Monster Beverage offers popular energy drink products such as Monster energy drinks, Monster Energy Extra Strength, Monster Rehab, non-carbonated energy drinks with electrolytes, Muscle Monster Energy Shakes and NOS energy drinks, among others. Monster has a market cap of $27.89 billion, a P/E ratio of 45.79, an enterprise value of $27.41 billion, a P/B ratio of 8.74 and a quick ratio of 2.25.

According to GuruFocus, Monster Beverage Corp. has a 9 of 10 financial strength rating with no debt. The company has an Altman Z-Score of 22.19, indicating that it is in the safe zone and is in no danger of filing for bankruptcy in the next two years. The company also has an 8 of 10 profitability and growth rating with an operating margin of 36.54%, a net-margin of 22.73%, a ROA of 12.25% and ROC (Joel Greenblatt (Trades, Portfolio)) of 249.91%.

According to Gurufocus, Monster Beverage Corp. has a 4-star predictability rating based on backtesting results. Stocks with a 4-star predictability rating produce, on average, a 9.8% yearly return over a 10-year sample size. Over the previous year, Monster's market price has climbed by an estimated 9%. Over the past 10 years, it has gained an estimated 774%.

Steve Mandel (Trades, Portfolio) likely added to his position in Monster Beverage Corp. for the following reasons:

  • The company is established with 26 years of operating experience.

  • The company has reported excellent financial results over the past 10 years.

  • The company has a broad portfolio of popular energy drink products that it sells to distributors, who then distribute them throughout the world.

  • The company has a 4-star predictability rating according to GuruFocus.

  • The company continues to expand its operations.


Guru Steve Mandel (Trades, Portfolio) graduated from Dartmouth College in 1978, and later graduated with a Master of Business Admistration from Harvard University. Mandel has been managing hedge funds since 1990. He first managed the Tiger Management hedge fund. He left Tiger Management and formed his own hedge fund, Lone Pine Capital, in 1997. The firm was named after a pine tree that survived a lightning storm at Dartmouth College.

Disclosure: Author does not own any shares of this company.

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This article first appeared on GuruFocus.


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