I Might Sell it all for a MONSTER PROFIT
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Well, today’s video I think is going to be very, very valuable to you guys out there. Today I’m going to take you through a position I am thinking about selling. And I’m gonna take you through an exercise that I love to do when going to sell a position I kind of do like a bear versus bull debate.
Kind of like the the bearish points on this stock, the bullish points in the stock and whatnot. It’s a stock app some pretty monster profits as you guys heard monster profits. Some of you guys might have figured that out.
It’s a company named monster beverage where I look at my cost basis on this one, how much money I’ve made so far. Also, toward the end of the video, I want to take you through kind of like the companies.
I am thinking about buying with this money if I do decide to sell out. And I would love to hear from you guys in the comment section if you think I should sell these shares if you think I should hold them.
After we’re gonna go through the bull and bear debate. I would love to hear from you guys also, like if I do sell it like what company do you think I should put the money in? I would love to hear from you guys.
So monsters. So this is in my public account, my public account is available in my stock market membership group. By the way, that group, if you want to join in there, it’s half off right now enter code half off at checkout today.
And you can get half off the price not only this month, but every month going forward. You have like over 100 private videos in there. I post videos Monday, Friday, so much value, it’s insane.
There’s something that interests you get in there. There’s over $100,000 in that account. And one of my positions in that account is monster beverage. Okay. This is a stock I bought probably a month or two ago, a month or two ago.
And it’s already up over 24%. Okay, up over $2,000. And this was on an investment that was only $8,000 investment. So it wasn’t like this was some huge investment. So it already be up over 2000 in such a short amount of time over 24% is pretty awesome.
All right. So our cost basis on those shares is $49.30. And so, you know, being up that much in that quick amount of time. It kind of makes me at least contemplate maybe I should sell out of these shares. Okay, so let’s start going through the bull versus bear debate.
And I’ll kind of tell you guys like what I’m thinking about buying if I do decide to buy some shares. All right. So the bull debate, all right, the bull debate? Well, the first thing is international expansion.
This is a company that is expanding all over the world right now, all over the world, any country you could possibly imagine they are either expanding more products in that country, or they are expanding into those countries for the first time.
So this is a huge international growth story. All right, monster. If you don’t know anything about the company, there’s this little juice company, these guys took it over in the 90s. And basically.
They start the Monster Energy brand in 2002. And ever since then, this company has been an absolute growth beast, one of the top performing stocks literally in the entire world over the past 15 years, literally one of the top performing stocks in the entire world the past 15 years.
Like if you just put a couple $1,000 in the stock back in the day and 2000 to 2003 like you would be a multimillionaire now it’s it’s absolutely insane what they’ve done. But they’re they’ve been in America since 2002. All right.
So there might not be nearly as much growth in North America. But internationally, some of these markets they’ve just entered within the past five years, some of them within the past three years.
Some of them are just within the past year or two. Okay, so they have a lot of international expansion ahead of themselves. That’s one of the bullet points in the stock. Alright. The number two thing is product expansion.
What do I mean by product expansion? It’s one thing to just expand the monster brand in other countries. But also there’s a company that is expanding at their types of products that didn’t just basic energy drinks.
Alright, they’re coming into coffee products. They’re coming into water products, pretty much anything across support, they’re starting to slap a monster name on monster soda products, and expanding the monster brand and people see it on a shelf and they already know the monster brand.
And they see it and they’re like oh, I feel like a soda maybe I feel like a monster so Oh, there’s a flavored water. Oh, it’s made by monster brand. Maybe I want that. So they’re expanding products in a huge way.
Okay, that’s another big thing on the third thing is price expansion. Okay, price expansion. So now actually, this was announced shortly after I gotten the stock so it was good fortune to be getting in the stock and then this ended up coming out.
But basically the CEO came out and said we’re probably going to be raising prices especially in North America starting the end of this year, maybe beginning of next year price expansion guess what that means.
That means more profits any any amount of money the excuse me any amount of you know increase in price as far as a monster goes that goes straight to profit. Okay, if monster goes up 20 cents a can it’s all straight profit. Okay.
If they go up 50 cents Canada is all going straight profit because their cost is already baked in regardless if they sell that can for $1 so they can for $2 All right. So that’s a huge thing and that could you know make ups go up in a great deal.
Number four is they’re taking market share from every single energy drink maker. They’re now the number one energy drink brand in the United States of America. Okay, number one.
They overtook Red Bull Red Bull used to have a dominant market share in every single market out there and monster slowly has been chewing away at that market share for the last decade.
And now they are at a point where now they have almost half the market share in the United States of America. And they’re eating into the Red Bulls market share all over the world, world.
Right now, it’s pretty unbelievable what the company has been able to do. So it’s not just all their products are probably gonna get more expensive means they’ve probably gonna make more APS.
Not only are they expanding into other countries and whatnot, but they’re also taking market share from Red Bull. That’s a really big thing that guys, all right. Number five, great management team like, like.
Oh my gosh, that is go to the management team as you can get they built this brand from nothing, Okay, a couple like, you know, a $50 million apple juice business and they built it into a company that’s worth 30 plus billion dollars.
All right, you know, a 50 $50 million apple juice business. And you know, 1520 years later, they got a 30 plus billion dollar energy drink giant on their hands. Okay. That type of management team, the two, you know, kind of CO CEOs and whatnot.
They’ve done such an amazing job with this company is nothing but good things to say about it. Okay. Number six brand strength, I mean, monster I put monster right there with Coca Cola brand, Pepsi brand, Red Bull, you know, monsters.
Right in with all I couldn’t necessarily say they’re stronger than those brands, or they’re weaker than those brands. But it’s unbelievable how strong the monster brand is, and how you know, well recognized the brand is around the world. Number seven is scale.
So basically, as your company gets bigger and bigger and bigger, you get more scale, you get you get even smarter at doing things because you’ve experienced things, you get more pricing power out on some of your suppliers and whatnot, for different things. Okay.
So as you get bigger and bigger and bigger, you just get more and more scale, and you get to, you know, you know, compete out there in a bigger and bigger way because you’re able to compete on pricing more and more. Okay, so that’s kind of the bowl.
That’s kind of the bullish stance. All right, that’s the bullish stance. But what’s the bearish stance? And that’s because ought to be some type of bearish stance. Otherwise, I wouldn’t even contemplate selling the shares. Okay.
There are definitely some things so the first one is a company is trading at a 41 trailing p e of 3140. That’s pretty rich. Okay. It’s an energy drink company. All right. You know, we’re talking about this is a high Ford p we’re talking about this is a similar Ford pizza company like Intuit. Okay.
This is a higher way higher for p than a company like Facebook, for instance, Facebook right now is trading at 20 to 40. We have monster over here, drink company trading out of 31.
So it is definitely a bit rich. Does the company have phenomenal growth? Yes, but still 3140 that’s kind of rich there. Okay. Second Bear’s point is they’re reliant on Coca Cola distribution.
So it’s not they basically coke cola made an investment in them bought about 18% stake. Since then they’ve really helped monster expand around the world. And they’re continuing to through the Coca Cola distribution. All right.
The only problem with that is is they’re relying on Coco’s distribution. So any problems that happened with that distribution is going to affect monster okay? If coke cola distribution decides they want to go up in a major way, monster pretty much just has to pay the price in the end, because what else are they going to do.
They’re going to have to just pay the price, okay? It’s not leaving can just switch very easily to some other distribution company. It’s a very, very hard thing to do, guys, it’s a very anybody that’s worked in retail convenience store business, like I have.
It’s not just so easy that a new distribution company can come in, just take out one, like it’s a big process and then you got to fix the coolers. It’s it’s so much in nevermind around the world.
It’s a big, big, it’s a big, big undertaking. So it’s great that they’re in the Coca Cola distribution and expanding around the world. But at the same time, it does put, you know, Coca Cola distribution in a in a position of power.
Let’s just put it that way. Okay. The number three thing is executive age. So I talked about how this is a great management team, okay? Unfortunately, both these gentlemen now are in their late 60s, okay, so they’re in their late 60s.
We don’t know how much longer they’re gonna want to lead this company. Okay. They haven’t said anything necessarily about retirement yet. But at the same time, they’re in their late 60s.
Who knows not everybody’s gonna be Warren Buffett, and still running their company at 87 years old, or whatever he is, okay. Not everybody wants to do that. Right. Some people, you know, they want to retire in their late 60s and just enjoy the rest of their life and enjoy all the wealth they created and whatnot.
Some people want to continue to run the company. I don’t know what what their plans are. But I can just tell you that at the end of the day, they’re getting up there in age, maybe it’s possible they want to retire soon.
There’s such great, you know, CEOs that accompany that. If they did retire, I wouldn’t take it as a negative. Okay, could they find somebody to probably replace them that does a great job, probably.
But at the same time, you know, these guys have just done such a phenomenal job it would be I would hate to see him go. Number four is commodity prices are hurting their ETFs right now, their profits, commodity prices have been going up and up and up for them.
All the commodities this company uses they’re all going up. So they have been hurt by commodity prices. So that’s kind of a bearish thesis there. And number five is raising prices could hurt sales volume, all right.
You know, there’s nothing we can know definitively about that. But let’s say let’s say monster goes up 20 cents a can, you know that’s what they see equates to at 711 or whatever. lenient stores people go to and whatnot, or wherever they buy monster, the food store, whatever. Okay.
Let’s say an average monster can is 20 cents more expensive? Does somebody say, Man monsters? 20 cents more expensive? I don’t think I’m gonna buy that today. I think I’m gonna buy another product.
That’s always a possibility. We don’t know we there’s no you know, specific science around if somebody says no C’s out there, you know, if you have a lot of money, it’s no question, you’re going to still buy the product if you want the product.
However, not everybody has a lot of money. Most people are struggling out there, that extra 20 cents they go up. Maybe somebody says, No, I’m not gonna have a monster today, I’m gonna have this other brand that’s cheaper or just not get anything in general.
So that’s always a possibility. So needless to say, that’s the bull, you know, debate versus the bear debate. Now, what would I end up putting the money in? If I decide to sell out here? Get the $10,000.
Like, what what I end up probably putting that in, I would probably end up putting it in two different stocks. Okay, the first stock I would probably put it in, I probably put half the money in Toll Brothers, which is a company already have like a lower cost basis on that position.
I think that company is very undervalued right now. Great home builders. So I put probably half the money there. Then they have the money I would probably put in FedEx shares, which basically I’ve been wanting to build a bigger stake in FedEx.
So I can put the other half of money in FedEx. I own some shares of FedEx right now, but it’s a very, very small position. It’s a four figure position right now, I would like to get that into a five figure position.
So maybe I would split the money half and a half and kind of build those positions bigger. That’s kind of what I’m contemplating right now. I would love to hear from you guys like what what your opinion is on this.
Do you think I should just hold monster keep the gains going? Do you think I should sell Do you think I should buy those stocks I talked about do you think I should buy a different stock I would love to hear from you guys.
Once again. My public accountant that is available on my stock market membership group. It is half off right now. First link down there in the description. Use code half off at checkout to literally receive half off this month and every month moving forward.
I would love to see you guys in there. I’d love to chat with you in there. That would be phenomenal. Thank you for watching. Have a great day.