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Monster Beverages: An Attractive Name In One Of 2016's Best Performing Sectors

Consumer staples has been a hot sector throughout 2016. One of the hottest stocks in the sector, Monster Beverage Corporation MNST 4.46%, hit a new 52-week high of $166.50 on Friday and is higher by more than 30 percent over the past six months.

Amit Sharma of BMO Capital Markets commented in a note on Friday that despite an already strong performance, Monster remains "one of the most attractive growth stories" within the staples sector.

Sharma cited Monster's second quarter earnings report, which showed consolidated sales rose 19 percent due to strong demand in the U.S. while the international segment saw a 32 percent sales growth.

Monster's consolidated gross margins also increased nearly 550 basis points to 62.4 percent due to a greater contribution from higher-margin concentrate sales.

Sharma added that the deepening relationship between Monster and The Coca-Cola Co KO 0.47% could signify Coca-Cola taking a higher equity stake in Monster. In addition, the soon-to-be launched hybrid energy drink called 'Mutant' signals that Monster's transition to Coca-Cola's bottling system is resulting in new distribution opportunities.

Bottom line, Monster operates a "pristine" balance sheet with a "strong" management team that is "completely focused" on generating long-term shareholder value.

DateFirmActionFromTo
Aug 2016JP MorganMaintainsOverweight
Jul 2016Wells FargoDowngradesOutperformMarket Perform
Jun 2016Goldman SachsMaintainsBuy

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.