As news circulated about five cases of deaths potentially
linked to Monster Beverage Corp. (
), currently being investigated by the US Food and Drug
Administration, Monster shares have dropped more than 11 percent
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The stock is currently trading at $40.85, almost $20 lower from a
GuruFocus Real Time Insider Trades
indicate that the latest recorded insider activity was a third
quarter purchase by Monster director, Sydney Selati, of a total
of 88 shares, bringing her total holding of the company up to
18,400; this transaction makes up one of only two purchases in
its recorded insider trading history dating back to 2007.
The rest of the recorded Monster trading activity has been sells.
Most of the sells that permeate prior fiscal quarters were done
by Monster chairman and CEO Rodney Sacks, and Monster vice
chairman and president, Hilton Schlosberg, selling as much as
three times in one quarter. Despite the frequent reductions to
their shareholding, both Sacks and Schlosberg proceed to own more
than 22 million shares to date.
It has been four months since the last batch of insider sells
have been recorded; the latest sells comprised of Selati's
$709,000 transaction, Senior Vice President Kelly Thomas' $1.2
million transaction, and Sacks' and Schlosberg's $32.4 million
Although selling activity has died down for now, SEC filings
indicate that several insiders have taken part in exercising
their stock options recently.
Schlosberg, Sacks, Thomas and Monster Beverage Division
President, Mark Hall, have all exercised their stock option in
Monster Beverage stocks have been on a downward trend since
reaching its one-year peak on June 18, steadily sloping
negatively after that, with its sharpest drop between Aug, 7-13
at about $15.
Several Gurus have reduced their shares of Monster since the
start of the year.
of First Eagle Investment Management LLC and Columbia Wagner both
reduced a quarter or more of its shares of Monster in the second
quarter. Jim Simons of Renaissance Technologies LLC reduced his
shareholding down 50 percent in the first quarter.
The following Gurus have sold out their Monster shares
completely: Steven Cohen of SAC Capital Advisors, John Burbank of
Passport Capital, Jeremy Grantham of GMO LLC and Bruce Kovner of
Paul Tudor Jones also sold out of his shares of Monster in the
first quarter, after keeping it on his portfolio since 2009. He,
however, bought 5,700 shares back in the end of the second
Monster has received much scrutiny after the mother of a
14-year-old girl who died last December, has filed a wrongful
death suit against the energy beverage titan, alleging that the
caffeine content in Monster Energy caused her daughter's cardiac
arrest and death.
The lawsuit was filed through the Superior Court of California,
Riveside County, which listed seven different counts of
complaints against the corporation including failure to
appropriately list its caffeine content on its labeling and fraud
due to concealment, suppression or omission of material facts, in
this case, failure to warn about the risks that come with
consuming its energy drinks.
About a week before her death, Maryland-native Anais Fournier
went to a local mall for two consecutive days where she consumed
a 24-oz. Monster Energy drink both times, according to the court
The lawsuit triggered FDA to hold an investigation, as well as a
confirmation that there have been five cases reported that
suggest people have died due to energy drinks.
In its second quarter financial report, Monster Beverage reported
a 28.7 percent increase in gross sales compared to the same
period last year. Its net income also increased 31 percent to
$0.59 per diluted share compared to last year's $0.45 per diluted
"We are continuing to expand into new international markets with
retail sales of Monster Energy commencing in Ecuador, Hong Kong,
Japan, Macau and Slovenie in the second quarter," CEO Sacks said
in a press release posted in August. "We are planning launches in
additional international markets later this year and in 2013."
Monster Beverage Corp. has a market cap of $9.41 billion, a P/E
(ttm) ratio of 28.1, a P/S ratio of 5.5 and a P/B ratio of 28.1.
Besides a Financial Strength rank of 9 out of 10 and a
Profitability and Growth rank of 8 out of 10, it also has a
Business Predictability rank of 3 out of 5 stars.
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In 2010, GuruFocus held a three-part Insider Research series
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Guru Insider Research (
): The Summary of Previous Research Results
Guru Insider Research (II): Can Aggregated Insider
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): Can Aggregated Insider Trading Activities Predict the Market
of Different Sectors?
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