Market Overview

Monster Beverage Comes Roaring Back After Deep Plunge at Open

The trading activity in shares of one-time high-flier Monster Beverage (NASDAQ: MNST) on Thursday has been noteworthy. The stock has been in a deep downtrend in recent months and opened the session more than 50 percent below its 52-week high of $84.00. After the closing bell on Wednesday, Benzinga noted that the stock was trading at new 52-week low levels after the company released its fiscal third-quarter earnings results. At its worst levels, shares were down around 14 percent to $38.75 in Wednesday's after hours.

After a steep gap lower to open the day, however, Monster has come roaring back and was last trading down less than one percent on the session. This represents a move of more than nine percent on an intra-day basis, as MNST opened down around 10.40 percent. This type of activity suggests that there were some motivated buyers that wanted to accumulate the stock in the $40.00 area -- right at a new 52-week low.

While Monster is an impressive secular growth story, its third quarter financial results left a lot to be desired. The company said that it earned $86.1 million or $0.47 per share, for the fiscal third quarter. This was an increase versus last year's corresponding period when the company earned $82.4 million or $0.44 per share. The results, however, came up significantly short of Wall Street earnings estimates of $0.55 per share.

Revenus also missed Street consensus expectations. Monster reported total sales for the period of $541.9 million. While this was a significant increase versus last year's $474.7 million in sales, it missed consensus estimates of $578.48 million by a fairly wide margin.

While the results were disappointing, the action in the stock on Thursday could be suggesting that a bottom has been found in Monster. This is a name that traders may want to keep a close eye on into next week. Monster should have recorded large losses on Thursday, and it did at one point, but those prices did not last long. This sort of price action suggests that there is considerable support for the stock at current levels and it may be only a matter of time before Monster gets its mojo back.

Posted-In: Earnings Long Ideas News Intraday Update Movers Trading Ideas Best of Benzinga

 

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