Fools Isaac Pino and Jeremy Bowman discuss three areas investors need to monitor regarding Monster Beverage.
First, future growth. In the past, Monster has grown at 30% a year, and now its growth rate is closer to 14%. The company is maturing and the market may be a little saturated. Can even a 14% growth rate be sustained?
Second, health and safety concerns. The Food and Drug Administration is investigating a girl's death associated with Monster Energy drinks. While there may be no direct link between her death and the energy drink, this incident opens the company to more regulation as well as negative press. How Monster responds to inquiries is important to its corporate image.
Third, future product launches. Monster was a bit of a niche player in the carbonated drink business and its first product was a definite home run. Can Monster continue hitting home runs as it starts competing more directly with larger, more established companies like Starbucks?
Isaac Pino and Jeremy Bowman own no stocks mentioned. The Motley Fool recommends Coca-Cola and Monster Beverage. The Motley Fool owns shares of Monster Beverage. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.