Many people correctly predicted that Hansen would bounce since the stock appeared undervalued and oversold. Congratulations for those who bought at the low 20’s who have seen the stock shoot back up 40%. However, technically, the chart is still quite ugly as the stock will have to see higher lows before the trend can be said to be broken. But I still like Hansen for these reasons

1. Fundamentals. No, Hansen did not beat earning estimates, it missed ever so slightly. But margins are relatively better, the company still has no debt with over 100 million in free cash flow and decreased operating expenses. Also, the company is still growing EPS and sales way faster than last year. Also, the EPS is now 1.72, meaning if the company continues to grow at 20% (it has done better), the stock should be worth about 35 in a year.

2. Market share. Monster has now surpassed Red Bull as the America’s top selling energy drink. Despite the energy drink business being dragged down by the recent economic slowdown, Monster is still gaining market share. Hansen is also proceeding in trying to capture market share in Spain, Sweden and the U.K. which means their expenses will be lower once the rollout process is complete.

3. The current stock price. At 28 per share, the downside is really limited since the stock is trading at such a low PE for its fantastic balance sheet and earnings growth. Insiders have bought back 1.7 million shares last quarter meaning they believe the stock is cheap too.

I don’t really enjoy energy drinks and monster to me just seems like a huge can of sugar and caffeine that makes my hand shake and my head hurt. But the stock looks like a good deal, while its on sale.

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