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No. of Recommendations: 3
Hi SlothropsMonkey,

In all honesty, I don't think the author understands Hansen that well.

First, he questions whether or not Monster can sustain current prices due to increasing competition. The fact is that Monster costs nearly half of what Red Bull (the market leader) does, and Monster's market share has been skyrocketing recently. When you realize that management is really putting a lot of R&D-type funds into expanding the Monster brand name, Monster should be the number one energy drink brand within the next 2-3 years.

I don't know why the author says Java Monster "has been anything but a monster". The Java Monsters have gotten very good reviews and have been received quite well by the market. Distribution is still in relatively early stages, so the product still hasn't really reached its full potential. I mean, it is less than a year old and the author seems to think that it should be a huge contributor to revenue already. This is a quote from the 3Q 2007 press release from Chairman and CEO Rodney Sacks:

"The energy category continues to show strong growth over the prior year, and the Monster Energy(R) brand continued to increase its market share. In particular, sales of our Java Monster(TM) line of non-carbonated dairy based coffee drinks have exceeded our expectations," Sacks said.

As for Hansen missing analyst targets, this has been due to one-time expenses related to the stock option investigation from last year. Had you taken out those expenses, Hansen would have either met or beat the consensus estimate.

So, don't listen to a word in this article. The author clearly has not done much digging on his own through the SEC filings and doesn't realize just how much Hansen is expanding and strengthening the Monster brand name. The new distribution deals will be coming into full play this year which will really boost the brand and sales as well. The balance sheet is incredibly strong and will fuel continued product development and expansion.

If Coke is indeed interested in buying Hansen, I hope management is smart enough to turn down an offer. Unless the offer was upward of $90/share I wouldn't even consider saying yes. I think Sacks realizes the strength of Hansen and the huge opportunity the company has both domestically and internationally.

The bottom line: I remain extremely confident in Hansen's future. Experienced management, super financials, the company is expanding what is one of the strongest brands in the beverage industry right now, and the new distribution deals will only strengthen the company's position.

Can you tell that I'm bullish? ;-)

Best,

David K
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