Hansen Keeps Growing

If there’s a leading candidate for “Stock of the Decade,” it’s probably little Hansen Natural Corp. (HANS). The company is known for its Monster Energy drink, which is essentially a mixture of sugar and caffeine. I’m told that people actually drink this. I’m guessing it’s the perfect beverage to keep you wired to play video games all night.

Personally, I don’t judge the products. I’m just interested in making money. And Hansen makes gobs of it. Three years ago, you could have picked up the shares for about $2 a piece. Since then, the stock has exploded.

Today the stock nearly hit $110 a share as the company reported another quarter of astounding growth. This is still a pretty tiny company, but let’s look at these numbers. Sales grew 83.9% to $133.6 million! Whoa.

At the bottom line, Hansen made 75 cents a share, which more than doubled last year’s fourth quarter net of 31 cents a share. Since the stock is still largely uncovered, we really can’t say that there’s a “Street consensus.” Nevertheless, the average of the three analysts came to 62 cents a share. The highest was looking for 67 cents a share, so in that sense I guess we can say that Hansen beat expectations.

For the year, sales were up 85.4%, and the company earned $2.59 a share compared with 86 cents last year. I have no idea how to value a stock like that. I have no idea even how to start! But I have a feeling that the biggest profits have already been made in Hansen.

Update: Hansen took a big hit after Cramer appeared on CNBC at 3:30.

Now, Cramer clears up his view:

OK, the venues collide. When I started my radio show today, which now airs live, I said that I thought that Hansen was taking share away from Coke and Pepsi, which makes it a good situation. I subsequently went on “Stop Trading” and said I thought it was clear that people were buying it today because of the soda weakness described in The New York Times. I then feel that I let myself get painted into an unfair corner where I didn’t like HANS.

Of course, you can’t go out in one medium and say you like it, and then say you don’t in another. That’s just ridiculously inconsistent. It is true that the “tape” turned down after my radio broadcast, making it seemingly difficult to sustain the rally in Hansen. But this decline off of “my comments” was way too harsh.

My long-term view on Hansen is that it is a share-taker and a valuable stock. My short-term view is that you can buy some, but expect it to go lower because the tape is so bad. The truncated style of “Stop Trading” created a false impression of negativity and I deeply regret the contrast between mediums, as it should not have come out that way.

Um…glad that’s all cleared up.

Posted by on March 9th, 2006 at 1:45 pm


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