Stock of the Week – HANS – Part 2

Stock of the Week - HANS - Energy DrinksMarket – S&P 500: Index is higher than MA(200), and both are still above MA(50); the situation still does not indicate an uptrend.

HANS – Hansen Natural Corporation, Midcap, Consumer Goods, Non-Alcoholic Beverages, $46.24 (13 Sept 10)

Let’s look at some financial numbers in 2010 and some facts that I just found out about Hansen Natural Corporation.

Sales growth? $604 million in the first half of 2010 as compared to $544 million in 2009, that is 11% increase in sales. However, net income decreases from $ 98.9mln to $96.4 mln, that is a reduction of  2.5%. Why is that? If you look further, the net income for Q2 actually increases from $57.3 mln to $63.8, so the decrease in the first half is caused by a decrease in net income in Q1 as compared to the same quarter the previous year. As explained by the management, the decrease of net income in Q1 is because there had been advance purchases by customers in Q4 2009 in order to avoid the per case marketing program and to avoid potential interruptions in product supply due to the plan of the transition to SAP enterprise resource planning system. Both the program and system transition commenced in January 2010. So Q2 2010 sales was in fact better compared to Q2 2009 and Q1 2010.

There are some interesting facts about Hansen Natural products. The company’s leading product is actually Monster Energy(R) drink which accounts to approximately 92% of its revenue. The  drink actually is the market leader amongst energy drinks with a market share of 29%. Hansen is a company that develops and markets products, but it does not manufacture, bottle or distribute the products. It relies on other companies to manufacture and bottle. For distribution, it has agreements with Coca-Cola Company and Anheuser Busch Companies to distribute across the US.

Outside the US, it has also made sales on the Monster Energy(R) brand in countries like Slovakia, Czech Republic and Norway. It is in the process of launching the brand in Germany, the United Arab Emirates, Lebanon and Jordan. Gross sales to customers outside the US has grown from $39.4 mln to $66.6 mln in Q2 quarter-to-quarter. That’s growth in international markets.

For further details, refer to Q2 2010 Financial Results and wikinvest.

Previous article: Stock of the Week – HANS – Part 1

Disclaimer: Techniques or analysis covered on this website are to be used at your own risk. I cannot guarantee the outcome of applying any of the techniques or analysis, will always be in your favor. You must always do your own analysis and make your own decision before you purchase a stock.

“Stock of the Week” is not a recommendation of stock. It is a coverage of an interesting stock. Unless otherwise stated, no actual purchases or sales of stocks are undertaken. Actions taken are only simulated trading.

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About zakton

I love Internet activities: browsing, blogging, commenting, learning from the Internet etc. etc.
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