Could one-time penny stock Monster Beverage Corp. (NASDAQ: MNST) be in the sights of beverage giant Coca-Cola as an acquisition target once again?
In April of 2012, the Wall Street Journal reported that Coca-Cola had considered purchasing the energy-drink maker, but Coca-Cola released a statement saying "at this time, we are not in discussions to acquire the Monster Beverage Corporation."
Industry experts say such a deal would be a real shot in the arm for Coca-Cola and the timing would be good, but they concede that Monster's price tag would be high. Currently, Monster is valued at about $11.3 billion.
However, this wasn't always the case, far from it.
On Dec. 29, 1995 Monster, then known as Hansen Natural, closed at 69 cents a share. On Feb. 6, 2014, Monster's shares closed at 68.02 a share, up $1.37 from the closing price of $66.65 the previous day. Its volume was 1,586,263 shares, slightly higher than its three-month average of 1,586,263
Did you know for example that the super-hip, trendy beverage company is not a new company, but has been around since 1935? So what in the world happened, and how could a penny stock investor have recognized that this obscure company would one day evolve and change its name to Monster in 2012?
Part of the answer is being at the right place with the right product at the right time. For more than a decade energy drinks popularity has grown beyond anyone’s wildest dreams.
Energy Drink Consumption Growing Faster than Coffee and Soda
In 2012, Americans spend $8.3 billion on energy drinks, up 16.6% from the same period in 2011, according to data from Euromonitor. Over the last 10 years the energy-drink sector has been enjoying double-digit growth, according to Beverage Digest. If you had been an observant penny-stock investor, you might have noticed this trend when it began and invested heavily in Monster.
Still, with the mounting popularity of energy drinks, comes the reality of investigations and ultimately lawsuits and government regulation. While at this point none of the allegations against Monster specifically and energy drinks in general have been validated, there is always a possibility they will be. This is a risk factor that every investor should consider as part of his or her investment strategy.
Find out what could be the best investor's move when it comes to MNST by getting the complete report here, or by cutting and pasting the following link in your Web browser:
Pier 1 Rises Major Home-Goods Player
Another one-time penny stock Pier 1 Imports Inc. (NYSE: PIR) has become a major player in the home goods niche.
But it wasn’t too long ago when Pier1's very existence was in question.
The Fort Worth, Texas-based retailer's stock value that had reached $25 in November 2003 tumbled to a meager 11 cents per share on March 13, 2009. Despite this, the company never filed for bankruptcy and an improving economy, housing market and a rising stock market have sent its stock surging to its old highs again.
Still, during the holiday selling season, Pier 1 did along with many other retailers did poorly. Its CEO Alex W. Smith blamed continued slow traffic caused by wintry weather for the pitiful 1.3% increase in same store sales for the five-week period ended Jan. 4, 2014, compared to the five-week period ended Jan. 5, 2013
That's why it's increasingly critical that the 2014 housing recovery becomes the real deal.
So far, there are some good market indicators. Here are just three of them:
- Fannie Mae's positive outlook for the 2014 housing market in a Jan. 13 statement by its Chief Economist Doug Duncan: "Despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, all of which bodes well for continued but measured housing recovery in 2014," Duncan said in a written statement.
- New homes are staying on the market for an average of 3.1 months before being sold, far less time than the average 5.5-month average for the last 30 years.
- A recent report by Wash.-D.C. financial publisher Kiplinger is forecasting that new-home sales are likely to soar by a solid 15% or 500,000 in 2014.
E-Commerce Growth Anticipated and Needed
An increasingly stronger online presence could also help turbocharge Pier 1's sluggish sales. The company witnessed the growing importance of its popular Web site Pier1.com when the ecommerce site ended up accounting for about 4% of the company's total December sales.
The good news is that the outlook for online sales is much better than it was in 2013. In 2014, ecommerce sales will soar to nearly $250 billion, up from $155 billion in 2009, according to Cambridge-Mass research firm Forrester. Last year, online retail sales were up a healthy 11 percent, compared to 2.5 percent for all retail sales.
On Feb. 6, PIR's share price closed at $18.67, up 33 cents from its close of $18.34 the previous day.
Find out what could be the best investor's move when it comes to PIR by getting the complete report here, or by cutting and pasting the following link in your Web browser:
Another Penny Stock with Resiliency
Real-Estate developer General Growth Properties Inc. (NYSE: GGP) is a company that has restructured itself several times to adapt to ever-changing marketplace conditions and competition.
During the real-estate boom of the 1990s and early 2000s, the Chicago-based developer and manager of prime retail space, saw its stock skyrocket to $64.00 a share in March of 2007. But when the real estate market crashed, General Growth Properties was forced to file bankruptcy and its stock price fell to 59 cents a share on Feb. 27, 2009.
General Growth Properties has recovered from the depths of becoming a penny stock and is currently selling in the $20 range. If you had invested $1,000 in the company when it hit its low five years ago, that $1,000 would today be worth about $38,898.
But more importantly, the company has appeared to learn from its earlier mistakes. It is acting proactively, reacting to a retail marketplace that is being swallowed live by online merchants
Its latest annual year results prove this point beyond a doubt.
General Growth Properties Reports Full Year 2013 Results
On Feb 3, General Growth Properties Inc. (the "Company" or "GGP") (NYSE: GGP) reported results for the three and twelve months ended Dec. 31, 2013.
For the three months Dec. 31, 2013 Company Funds from Operations ("Company FFO") per share increased 17.0% to $0.36 per diluted share from $0.31 per diluted share in the prior year period. Company FFO increased 11.3% to $347 million from $311 million in the prior year period.
Company Earnings Before Interest, Taxes, Depreciation and Amortization ("Company EBITDA") increased 3.7% to $556 million from $536 million in the prior year period.
Comparable Net Operating Income ("Same Store NOI") increased 6.2% to $582 million from $548 million in the prior year period.
Net income attributable to GGP, which is impacted primarily by depreciation expense, provisions for impairment and a gain from change in control of investment properties, was $77 million, or $0.07 per diluted share, as compared to $32 million, or $0.04 per diluted share, in the prior year period.
For the 12 Months Ended December 31, 2013 Company FFO per share increased 18.2% to $1.16 per diluted share from $0.98 per diluted share in the prior year period. Company FFO increased 15.7% to $1,148 million from $992 million in the prior year period.
Company EBITDA increased 4.3% to $2,015 million from $1,932 million in the prior year period.
Same Store NOI increased 6.0% to $2,112 million from $1,993 million in the prior year period.
On Feb. 6, GGP's share price closed at $20.29, up 12 cents from its closing price of $20.17 the previous day.
Find out what could be the best investor's move when it comes to GGP by getting the complete report here, or by cutting and pasting the following link in your Web browser:
Wish You Had Bought into True Religion?
Here's another penny stock that investors, who passed it by when it was a penny stock, wish they hadn’t.
True Religion Apparel, Inc. (NASDAQG: TRLG) is now a successful company that designs, manufactures and distributes a variety of luxury denim products, including its premium True Religion Brand jeans. Its share price is a few pennies shy of its 52-week high of $32.00.
Yet, it started out as a penny stock that some thought was a throw-away. On Jul.30, 2004, True Religion shares traded as low as 67 cents. If you had invested a $1,000 in the stock then, your investment would have grown to about $47,761 today. Not a bad return.
The Vernon-Calif.-based company operates 148 stores in North America and over 30 international stores. Its claim to fame is that it was able to create a product that captured the imaginations of young, financially affluent jean buyers. That along with good management moves has made the stock a superb investment over time.
Still, the company faces challenges, which it has no control over. Designer jeans are big sellers in Europe, but new retaliation tariffs being slapped on some of them by the European Union could potentially kill that market, according to the California Fashion Association.
"The category of 'women's denim trousers' had been dropped from the EU retaliation list several years ago; however the category is now hit with a 26% additional tariff, bringing the total import duty for the period May 1, 2013, through April 30, 2014, to 38%," said a written statement from the association.
How this tariff will affect True Religion European sales over time remains to be seen.
TRLG's share price closed at $31.98 Feb. 6, up 5 cents from its close of $31.93 the previous day.
Find out what could be the best investor’s move when it comes to TRLG by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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