Do you know which company’s stock performed the best over the last 30 years? It’s a tough question because there were so many really big winners. So here are a few hints that may help. The winning company never tried to revolutionize the retail industry. Nor has it developed state-of-the-art technology, attempted to discover new medicines, or explored for oil, gas, or gold. Its products are easy to understand, can be purchased for pocket change, and never need updating.
The answer is Monster Beverage Corp. (stock symbol: MNST), a company that sells energy drinks of all things. Over the years, many investors have dreamt about finding a stock like this, and those who risked a few kopeks have been richly rewarded.
When Hashem Wants…
Monster is a perfect example of how amazingly well things work out when Hashem gives a brachah. Thirty years ago – in Feb. 1994 to be precise – Monster’s shares were trading below a nickel. But in mid-March this year, the stock was nearly $61/share - and that’s after splitting six times. According to CNBC the price has increased well over 200,000% times during this time.
No other stock comes even close to this. The second-best performer is NVR, up 72,000%. This is followed by Apple, which gained 56,000%, Cooper Companies, up 49,000%, and in fifth place is Ross Stores, which racked up some 32,750%. Of course, those numbers are nothing to sneeze at, but they’re also not quite as spectacular as Monster’s. Amazingly, despite its performance, the company’s stock hasn’t gotten the recognition that other great stocks have.
Monster surprised Wall Street and very likely its founders, too. The company’s roots reach back to 1990, when two South African entrepreneurs, Rodney Sacks and Hilton Schlosberg, purchased a small juice company called Hansen Natural. Early in its history. Hansen was a private firm, but in 1997 the owners decided to branch into what was then a small new market, energy drinks, by starting Hansen’s Energy. This was five years before the company started selling its drinks under the Monster Energy label and 15 years before it adopted the Monster Beverage moniker.
Monster “was brought out of bankruptcy and they created the Monster brand out of nowhere, launched it and then it just kept on building and building,” said Nik Modi, Managing Director at the investment firm RBC Capital Markets. “They were very slow and methodical in how they built the distribution, making sure that they were strong in every market it was in.”
Monster not only caught on but was growing at a rate that drew the attention of Coca Cola; this was quite a feather in the company’s proverbial cap, because Coke is the largest beverage manufacturer in the world, one of the largest companies in the U.S., and a marketing powerhouse.
Coke was so impressed that it purchased a 16.7% stake for $2.15 billion in cash, a stake that has since grown to 20%. What this investment means is that Monster now has access to a giant war chest of cash, and that it is backed by the marketing muscle of Coca Cola. Incidentally, Warren Buffett’s Berkshire Hathaway owns 400 million shares of Coke, which are worth nearly $24 billion and therefore indirectly has a significant investment in Monster.
CNBC reports that as part of their relationship, Coke transferred ownership of its energy drinks to Monster, which in turn traded its non-energy drink businesses to Coke. “Coke became Monster’s preferred global distribution partner and agreed that Monster’s brands would be the only energy drinks it would distribute.” CNBC also reports that since their partnership in June 2015, Monster’s market cap has nearly tripled, jumping from $22 billion to approximately $63 billion in March 2024.
According to Modi, Monster stock’s incredible performance is easy to explain. “Monster’s brilliance is in knowing its customer, and selling its best product, Monster, for the same price as main competitor Red Bull’s product - only with twice the volume.”
Mark Astrachan, Managing Director at the Wall St. firm Stifel, said Monster “really resonated, especially with younger consumers and blue collar workers, which continue to be the bread and butter of the business.” Focusing on that core customer was and continues to be the company’s key strategy.
Unconventional
If Monster chose a song that best explains its approach that probably would be “I Did It My Way.” Unlike other companies, which utilize traditional marketing, Monster pursued a very different game plan. For example, rather than focusing on major sports, they targeted unconventional sports such as rodeos and advertised heavily there. This approach has been very effective and has generated many new customers and new business.
“They were able to figure out who their consumer was and went after events those consumers paid attention to,” explains Astrachan.
Another difference between Monster and its competitors is that its drinks aren’t sold in bars or marketed on TV. And still another is that the company doesn’t seek publicity. They grant very few interviews, and even then, only for specific occasions such as earnings calls, which they have four times a year; on occasion, they also grant interviews at the time of one or two other events.
Modi says that “The way they built the brand is quite unique. They focus less on the category and more about the lifestyle and what you can accomplish with the product.” Obviously, this strategy has paid off big time.
Monster offers a variety of products, ranging from alcohol to coffee and to various energy drinks. Unlike high tech products, which need to be updated continuously, their drinks keep the customers satisfied without needing any significant changes.
“Monster is essentially a marketing company that’s selling a brand,” says Astrachan. “There’s very little capital intensity and they produce way more cash than they can ever spend. It’s a really good problem to have.”
In 2023, Monster reported record sales of $1.86 billion – 14.3% higher than in the comparable year earlier period. Much of those gains were generated by Monster Energy drinks, which includes several brands.
In hindsight, it’s easy to understand exactly what made Monster so great in the past; the real trick is trying to figure out the future. Will the company continue its years of winning ways or, like so many others, will it run into challenges and shed much of its gains? No one knows. Shareholders are certainly thinking carefully about this, and so is the rest of Wall Street.
Sources: britannica.com; bloomberg.com; cnbc.com; stockcircle.com
Gerald Harris is a financial and feature writer. Gerald can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.
