How Monster Beverage Corporation Gained 13% in November

MNST data by YCharts

What: Shares of Monster Beverage gained 13.4% in November, according to data from S&P Capital IQ. It has been a bumpy year, but the energy drink veteran's shares have soared more than 40% year-to-date.

So what: The big driver of Monster's November rally was a fantastic third quarter report posted in the first week.

Sales rose 19% year-over-year to $757 million, earnings soared 44% higher to land at $0.84 per share, and both figures stomped Wall Street expectations. The next day, Monster shares jumped more than 14% higher, essentially accounting for the entire month's strength in one fell swoop.

Now what: The company is getting into all kinds of new business opportunities these days. From exploring new international markets to selling high-margin concentrate for soda machines and easy bottling in far-flung geographic corners, the potential dollar signs are popping up all around Monster.

For example, 9% of its third quarter sales came from the new concentrate business. That may look small, but the exceptional profit margins in this hyper-efficient business model lifted gross margins from 53.8% to 61.5%.

And it's pretty obvious where many of these new ideas started. Thanks to a deep partnership with soft drink titan Coca-Cola , Monster now has access to a worldwide, world-class distribution network and some of the best production facilities on the planet.

"We are pleased to report good progress on the implementation of our strategic alignment with Coca-Cola bottlers," said Monster CEO Rodney Sacks in November. That's a solid candidate for the coveted "understatement of the season" awards.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Monster Beverage. The Motley Fool has the following options: long January 2016 $37 calls on Coca-Cola, short January 2016 $43 calls on Coca-Cola, and short January 2016 $37 puts on Coca-Cola. The Motley Fool recommends Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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