There's a school of thinking that's based on more promise in superior gains than in digging up great starting prices, even if you seem to be overpaying for that bottle rocket. Richard Driehaus, the godfather of momentum investing, takes exception to buying low and selling high: "I believe that far more money is made buying high and selling at even higher prices." And our Rule Breakers analysts would agree with that: Momentum-like criteria show up twice in the six pillars of that newsletter's strategy.
Price momentum may not be a traditional marker of a strong business or a capable management team, but when you think about it, those qualities should eventually generate strong returns. This is just a slightly backwards way of looking at the numbers, throwing "cause" and "effect" into the same basket to find a starting point for more research.
One potential bottle rocket stock that caught my eye today is Rule Breakers recommendation Hansen Natural
Here's how Hansen's gains stack up against some direct rivals over the past year:
|
Company |
% Above 52-Week Low |
% Below 52-Week High |
|---|---|---|
|
Hansen Natural |
88% |
(3.5%) |
|
Coca-Cola |
16% |
(6%) |
|
PepsiCo |
15% |
(5.1%) |
|
Dr Pepper Snapple Group |
44% |
(8.5%) |
Source: Motley Fool CAPS.
Past performance is no guarantee of future results, and you should always do more research after finding a promising stock by screening. In this case, we're looking at a high-growth legend of the same magnitude as oblique rival Starbucks, and this all-star still has years to go before hanging up its cleats.
Hansen's Monster Energy drink fights a global duel with sector-starter Red Bull, and the battle grows increasingly international. Monster has established itself as a leading energy drink brand here in the U.S., but plenty of places abroad remain largely untapped. That's where the next 10 years of steady growth will come from.
Buy now or forever hold your peace: This bottle rocket still has plenty of dry powder left in its growth engines.
