The board of
Monster Beverage Corporation
) has approved an additional $200 million share repurchase
program, thereby bolstering shareholder value.
Under the latest program, the company's board has authorized
the repurchase of up to $200.0 million of its common stock.
Monster repurchased approximately 6.7 million shares for $340
million in the fourth quarter of 2012, results of which were
reported on Feb 27. Soon after the fourth quarter, the company
repurchased an additional 0.3 million shares for approximately
$16 million, thereby exhausting the available amount under the
current share repurchase authorization of $250 million.
Share buybacks help the company reduce outstanding share
count, thereby increasing earnings per share and return on
equity. Apart from bolstering shareholder value, this strategic
move will also lift the relatively undervalued share price.
Regular share buybacks also reflect the company's confidence in
Monster's fourth quarter 2012 earnings of 39 cents per share
were ahead of the prior-year quarter by 10.6%, driven by top-line
growth. Earnings, however, missed the Zacks Consensus Estimate of
41 cents. Sales grew 15% on a year over year basis, owing to the
strong performance of Monster Energy brand in the international
markets. The company is expected to continue to launch new brands
Monster holds a Zacks Rank #3 (Hold). Other beverage companies
that warrant a look include
Companhia De Bebidas Das Ame
Coca Cola Hellenic Bottling Co.
Molson Coors Brewing Co.
). While ABV carries a Zacks Rank #1 (Strong Buy), Coca Cola
Hellenic and Molson Coors hold a Zacks Rank #2 (Buy).
AMBEV-PR ADR (ABV): Free Stock Analysis
COCA COLA HELNC (CCH): Free Stock Analysis
MONSTER BEVERAG (MNST): Free Stock Analysis
MOLSON COORS-B (TAP): Free Stock Analysis
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