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Company name Monster Beverage Corp
Stock ticker MNST
Live stock price [stckqut]MNST[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Good
P/E growth Good
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $95.6
Target stock price (averages with growth) $117.02
Target stock price (averages with no growth) $75.65
Target stock price (manual assumptions) $88.38

The following company description is from Google Finance: http://www.google.com/finance?q=mnst

Monster Beverage Corporation, formerly Hansen Natural Corporation is a holding company. The Company develops, markets, sells and distributes alternative beverage. alternative beverage category combines non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored, unflavored and enhanced) with new age beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages. It has two reportable segments, namely Direct Store Delivery (DSD), whose principal products comprise energy drinks, and Warehouse (Warehouse), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily directly to retailers.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

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I repeatedly try to encourage my readers to cut back on spending to enable a higher level of savings. It is best if you automatically deduct 10% of your income from your paycheck and immediately divert it to another account in a separate institution. This means that you effectively take a 10% income hit.

In order to afford that income hit, you may need to reduce your spending. I came across this article on Mainstreet.com on the 12 things to stop paying for in 2012 but I think it is timeless. You shouldn’t pay for this stuff in ANY year.

  1. Coffee Shop Visits
  2. Incandescent Light Bulbs
  3. Disposable Water Bottles
  4. Baggage Fees
  5. Subscriptions You Don’t Use
  6. Baby Food
  7. Credit Score Fees
  8. Cable
  9. Landline Phones
  10. Cleaning Supplies
  11. ATM Fees
  12. Home Repairs You Can Do Yourself

You may find that this list includes things that are more frugal than you desire. This is false bravado. If you are not investing 10% of your after-tax income as I suggest in my book, The Confident Investor, then you are making a mistake. Do not be wasteful AND a poor investor!

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Being a confident investor implies that you have enough money to invest. I am constantly getting requests from my site or via Twitter regarding how to get started investing. Many people appear to understand that it is important to invest but do not currently have the funds to do it.

If you read my book, The Confident Investor, you will learn that I recommend that you take 10% of your income out of your paycheck and move it to a separate savings account for investment purposes. I have also discussed this concept on this site. This 10% comes out before you spend a single dime on expenses. You are effectively cutting your income by 10%.

To cut your income by 10%, you will likely need to cut your expenses by at least that much. Recently, I read an article on CNN about the 10 biggest money wasters. These might be areas to consider for you:

  1. ATM Fees
  2. Lottery tickets
  3. Gourmet coffee
  4. Cigarettes
  5. Infomercial impulse buys
  6. Brand-name groceries
  7. Eating out
  8. Unused gym memberships
  9. Daily internet deals
  10. Bundled cable or phone services

In each of the above, CNN explains the common waste and suggests a way to save the money. Following all of these suggestions (if you were guilty of all of them) would probably knock of $50-100 per week. $100 per week means $5,000 per year towards your investment portfolio.

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Company name Starbucks Corporation
Stock ticker SBUX
Live stock price [stckqut]SBUX[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Fair
EPS growth Good
P/E growth Fair
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $72.01
Target stock price (averages with growth) $96.94
Target stock price (averages with no growth) $71.2
Target stock price (manual assumptions) $68.23

The following company description is from Reuters: http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=SBUX.O

Starbucks Corporation (Starbucks), incorporated on November 4, 1985, is a roaster, marketer and retailer of specialty coffee, operating in more than 50 countries. Starbucks purchases and roasts whole bean coffees that it sells, along with handcrafted coffee and tea beverages and a variety of fresh food items, through Company-operated stores. The Company also sells a variety of coffee and tea products and licenses its trademarks through other channels, such as licensed stores, grocery and national foodservice accounts. In addition to its flagship Starbucks brand, its portfolio also includes Tazo Tea, Seattle’s Best Coffee, and Starbucks VIA Ready Brew. Starbucks has three operating segments: United States (US), International, and Global Consumer Products Group (CPG). Its Seattle’s Best Coffee operating segment is reported in Other with its Digital Ventures business. As of October 2, 2011, the Company operated 9,031 stores and 4,776 licensed stores. During the fiscal year ended October 2, 2011 (fiscal 2011), in the United States, 49 Company-operated stores were opened, and 51 were closed. Internationally, 180 Company-operated stores were opened, and 36 stores were closed. In October 2010, the Company acquired Magic Johnson Enterprise’s remaining 50% interest in Urban Coffee Opportunities. In November 2011, the Company acquired Evolution Fresh, Inc.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

 

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Company name McDonald’s Corporation
Stock ticker MCD
Live stock price [stckqut]MCD[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Poor
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $76.73
Target stock price (averages with growth) $92.68
Target stock price (averages with no growth) $82.48
Target stock price (manual assumptions) $81.17

The following company description is from Google Finance: http://www.google.com/finance?q=mcd

McDonald’s Corporation franchises and operates McDonald’s restaurants in the global restaurant industry. These restaurants serve a menu at various price points providing value in 119 countries globally. As of December 31, 2011, of the 33,510 restaurants in 119 countries 27,075 were franchised or licensed (including 19,527 franchised to conventional franchisees, 3,929 licensed to developmental licensees and 3,619 licensed to foreign affiliates (affiliates)-primarily Japan) and 6,435 were operated by the Company. McDonald’s menu includes hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, Snack Wraps, French fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafe beverages and other beverages.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.