HANS takes a Haircut

by Dual Income No Kids on November 9, 2007 · 0 comments


Ouch. – Thats about all I think this morning. If you recall we DINKs are shareholders in the Hansen’s Natural corporation. Well, a couple of days ago they missed their earnings numbers and the stock promptly lost 30% of it value. Reuter’s has the full story here. I’m including a picture of the stock’s price drop you can see the carnage.

In terms of what this means for the stock, and for our portfolio, on reflection I’m not convinced that Hansen’s growth story is over. The company has come from out of nowhere to take 27% of the energy drink market with its Monster energy drink. Their gross sales are up 44% from last years quarterly numbers and they’re introducing a new coffee product to try to compete with Starbucks.

The market seems to be responding to the fact that Hansens has higher legal and raw goods costs, but also that their core product – Monster – slipped by 3 to 4% in addition to some difficulties in making the transition to the Anheiser Busch distribution system.

My take is that HAN’s story is essentially unchanged. They’re still selling a boatload of energy drinks so its highly likely that in three months the price of the company will be back up in the 60 dollar range.

Best,

James

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