Monster Beverage Corp.(NASDAQ: MNST) Points Out Flaws In DAWN Report, While a New Player Enters the Market

Monster Beverage Corp.(NASDAQ: MNST) Points Out Flaws In DAWN Report, While a New Player Enters the Market

Monster Beverage Corp.(NASDAQ: MNST) Points Out Flaws In DAWN Report, While a New Player Enters the Market

The Drug Abuse Warning Network (DAWN) recently released a report about emergency department visits related to energy drinks. According to data collected by DAWN, it was reported that an average energy drink has the caffeine content of a 5 ounce cup of coffee, and that caffeine induced emergency room visits were due to energy drinks that have extremely high concentrations of caffeine as compared to coffee and other natural drinks.

Monster Beverage Corporation (NASDAQ: MNST) took exception to the report and pointed out several flaws and contradictions. The company released a statement where they stated that a 16 ounce cup of coffee from major coffeehouses in the country contains about 320mg of caffeine. Whereas, the 16 ounce Monster energy drink contains 160mg caffeine. The company also pointed out that more than 40% cases included in DAWN’s report were of patients who used pharmaceuticals, illegal drugs, and alcohol, so their emergency room visits cannot be blamed on energy drinks. Moreover, the company pointed out that the number of illegal drug users is largely underestimated as most people would not share that information.

The stock value of Monster Beverage Corporation is at 47.24 dollars at the time this article is being written, and the company is worth 8.089 billion dollars. It is far from an emerging growth company. However, Hansen’s Naturals (previously NASDAQ: HANS), one of its subsidiaries is still emerging. We are at odds here whether to classify Hansen’s as a different company altogether, but at the end of the day it does not have its own listing in the stock market, and is fully owned by Monster Beverages Corporation.

Hansen’s Naturals deals in all natural products. They deal in lemonade, natural sodas, juices, tea, and coconut water. Their products are in stark contrast with what Monster is known for, and can turn out to be major game changers for the company in 2013. The last quarter of 2012 was full of controversy, as Monster faced lawsuits for energy drink related deaths. Their stock prices are unstable to say the least, and even the NASDAQ trends do not bid well for Monster at the moment.

Meanwhile, Hansen’s Naturals are slowly and steadily gaining market share, and we would not be surprised if Monster decided to increase its investment in the subsidiary.

A New Star on the Rise?

A relatively new entrant in the beverages industry has also started making the news, mostly because of its large international distribution network and due to its very low stock price. The Pulse Beverage Corporation (NASDAQ: PLSB) has recently invested more than 10 million dollars in marketing, and is looking to be a major shareholder in the health drinks market.

Their stock price is under a dollar at this point, and it appears as if they have no way to go but up. During the first quarter of 2013, Cabana lemonades and health products are expected to bring in major revenue. The company has 7,500 retail outlets in US alone, and Cabana will be delivered to all those outlets during this quarter.

With less than one dollar a share, we strongly recommend some of you risk takers to invest in Pulse Beverage Corporation. This company has enormous potential to expand and to go toe to toe with the likes of Coca Cola and Monster in the future.

Are you willing to take the risk with Pulse Beverage Corporation? Or would you put your hopes in Hansen’s Naturals to help in a major recovery for Monster Beverage Corporation? We are eager to hear your opinion in the comments section.

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  • mrgambale@gmail.com

    Monster is going to leave a sour taste with most consumers, as most folks will choose another drink due to the bad publicity. Since the competition is so fierce in the space, one bad piece of news about a product and customer will generally go elsewhere. I would rather invest in Pulse..

  • Lillie

    I have never been a fan of Monster, as a company or the drink. As for Pulse…going toe to toe with Coke will be interesting to see. Has a long way to go to do that but will watch and see what happens.

  • mrgambale@gmail.com

    Have never tried the Monster drink, and probably never will. Way too adventurous for me. And that’s part of the issue, is that the drink only applies to a certain target market.

  • mrego123

    I was a big Monster fan prior to the DAWN report. I would have them often but never more than 1 a day. The report showed the true dangers of these drinks and I believe that there the company sustained a significant blow that will never fully be healed. As for Pulse….little late to the party that is dying out.

  • meikoacebo

    I think 2011 was the year of these energy drink stocks. The problem is that these companies have no barriers to entry and a bigger beverage company could launch a better product. Then margins will start to fall.