(By Mayur Pahilajani - iStockAnalyst Writer)
New York, NY – Watch out of the maker of popular Monster Energy beverage maker, Hansen Natural Corp. (NASDAQ: HANS), as it releases its financial results for the final three months of fiscal 2008, after the bell.
The Corona, California-based company has drawn investors’ attention every year with consistent growth with high returns on capital and with an average earning growth of around 113 percent in the last five years.
The creator of a whole category of natural beverages is on the “Buy” list of most of the market analysts on Wall Street, including the analysts at Stifel Nicolaus & Co.
The estimate target price on the firm’s stock was increased to $39 from $34 by Stifel Nicolaus analysts, citing lower commodity costs, rising volumes and dropping marketing expenses.
Hansen's growth slowed in 2008, but it has still performed well in a dismal recessionary environment. The earnings per share projection for the company in 2009 is at $2.09; while, for 2010 is at $2.35, higher from $2.20 per share.
Last year, the Coca-Cola Company (NYSE: KO) signed a 20-year distribution agreement with Hansen Natural, including sales of Hansen's Monster Energy drinks in six Western European nations, Canada and in 21 states in the U.S.
The company, which has a market cap of $3.34 billion, consistently gained revenue on higher sales in emerging markets compared to the U.S. market, where dropping consumer spending is forcing people to cut down on their grocery shopping list.
Now, there are rumors that Coca-Cola is in talks with Hansen Natural to take over the energy drink maker to boost its earnings against PepsiCo, Inc. (NYSE: PEP). At present, Coke manages almost 50 percent of the total volume of the Monster trademark in North America.
"As the economic environment strengthens, we believe our continued investment in our brands, customer and franchise relationships will enable us to return our sparkling brands to growth and accelerate continued growth in our still brands," Coca-Cola told StreetInsider.com recently in an interview.
It added, "We will not be content to just ride out the storm. We will leverage this as an opportunity to drive our business for the long term and build on our track record of success."
The share of the company closed down by 98 cents or 2.93 percent to $32.46 in yesterday's trading session. Hansen Natural has shown bullish sentiment as it inches towards its 52-week high of $45.45, away from its 52-week low of $20.52 on NASDAQ market with average volume of 1.42 million and a P/E ratio of 18.13.
