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Monster Beverage Soared 65% in 2014. What’s Next?

The energy-drink giant continued its sensational long-term performance in 2014, but what will the coming year bring?

ear after year, Monster Beverage (NASDAQ:MNST) has found itself among the 10 best stocks in the market, sporting amazing long-term returns that are the envy of Wall Street. Yet just when it seems like the energy-drink specialist has finally topped out, Monster Beverage finds a way to kick itself into overdrive once again and produce even better performance. That’s what happened in 2014, as Monster Beverage stock rose another 65% after attracting the interest of a longtime competitor. Let’s take a closer look at Monster Beverage’s 2014 and what lies ahead for the beverage company going forward.

The one big buy that gave Monster investors a smile
Throughout the first half of 2014, Monster’s performance was uninspiring. Even though the beverage company kept on posting reasonable revenue growth — sales jumped almost 11% in the first quarter from year-earlier levels — Monster’s stock responded negatively, as investors longed for the faster growth rates that the company achieved in past years. Moreover, despite every attempt to reassure consumers, persistent worries about the possible health impact of Monster’s beverages continued to plague the company, and that translated into some hesitancy among investors to push share prices even higher.

That all changed in August, when Coca-Cola (NYSE:KO)announced that it would take a 16.7% stake in Monster for $2.15 billion. That move certainly benefited Coca-Cola, which has struggled to make a splash in the energy-drink space, with its own offerings falling short on market share. But for Monster Beverage, it provides valuable access to Coca-Cola’s highly efficient distribution network, and that will help the company especially in the international markets, where rival Red Bull has had a much larger presence than Monster.

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