Here is an interesting pairs trade in the beverage sector from Joe Duarte.
In a market that’s crashing and burning, it’s difficult to find stocks which display relative strength. One interesting candidate is Monster Beverage (MNST) the company responsible for the Monster Energy drinks.
When compared with the shares of its two largest competitors in the soft drink sector, Coca Cola (KO) and Pepsi (PEP), Monster was clearly a cut above during last week’s selloff. This is likely to stem from the fact that although Covid-19 made a dent in its convenience store sales, as would be expected, the virus’ effect was much less than what it was on its competitors, given its niche, especially during challenging times in which people need energy boosts in order to perform daily tasks under stress. Remember those in the GIG economy may not have had access to unemployment insurance so they have to add hours in flourishing food, grocery and Amazon-type delivery jobs. In fact, the company reported a slight gain in market share in its most recent earnings.
registered rising sales in its products sold through Amazon.com in the U.S. while also registering gains in Europe. The stock is off of its recent high but has good support near the $67 area. A sustained move above $70 could take the stock significantly higher if the market holds up.
I own shares in MNST
I have compiled a small list of companies whose stocks are showing relative strength and may be worth owning. The list can be accessed via a FREE trial to Joe Duarte in the Money Options.com To subscribe to my service, click here
