In the following video, Jeremy Bowman and Isaac Pino discuss three reasons investors should sell or avoid Monster Beverage.
First is the fallout from deaths reportedly associated with drinking Monster energy drinks. The FDA has opened an inquiry, and the outcome is unpredictable. How the company responds to the investigation and negative press will affect its image and appeal.
Second, recent earnings growth has slowed and the stock price has declined. For years, Monster was on a tear; now it's looking more like a mature company in a maturing market. Past growth may be difficult to sustain in the future.
Finally, Monster, for all its success, is still a young company. Stability is not yet an asset. The company has experienced difficulty growing outside its original energy-drink market. The transition to a mature company competing with strong, well-established competitors may be problematic.
