Stocks to Watch Thursday: Monster Energy Scares Its Shareholders

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The worst thing about energy drinks is the letdown crash after the kick fades away.

Well, Monster Beverage (MNST) investors know the feeling. Shares of the company behind the popular Monster energy drinks crashed after it posted disappointing quarterly results on Wednesday night.

The second-quarter report seems solid on the surface. Net sales rose 28% to $592.6 million and earnings soared 30% to $0.59 a share. The problem here is that analysts were banking on a profit of $0.61 a share on $596.1 million in revenue.

Monster may have barely missed on both ends of the income statement, but investors come to expect great things out of a stock that has climbed nearly 50% higher this year ahead of report. It doesn't help that the market is generally cynical about the potential trendy nature of energy drinks.

Monster is second only to Red Bull as far as energy drink sales go, and there may be some potential for the company to boost its presence overseas. International sales soared 50% during the quarter, but still account for less than a quarter of the company's gross sales.

For now, the only thing that this Monster is scaring is its shareholders.

Other Things Worth Watching

  • Zynga (ZNGA) has been one of the worst IPOs over the past year, and things just aren't getting any easier for the leading social gaming company. An SEC filing on Wednesday night revealed that COO John Schappert was resigning immediately. Severance With Friends, anyone?
  • Amgen (AMGN) is ending a late-stage clinical trial study on a treatment for pancreatic cancer patients. The data was not showing any improvement in patient survival. Amgen is a diversified biotechnology giant, but the news is a setback to both its pipeline and future pancreatic cancer patients.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Monster Beverage.


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