They couldn't be more different in ethos. They couldn't be more alike in growth. And they can still be bought, even after the magnificent moves post the quarterly reports.
I'm talking about WhiteWave (WWAV) and Monster (MNST), the natural and organic food and drink company, and the unnatural, totally inorganic beverage business. Both are ragers, just selling products like crazy, and both are must-own on either an earnings or a take-out basis.
White Wave reported a couple of weeks ago and it looked like just an in-line quarter, but that's because they had to spend so much to ramp up factories to meet demand, particularly of plant-based beverages and yogurts. Just to give you a sense of the magnitude of the upside here, plant-based beverages roared ahead 21% in the Americas, and almond milk -- something we can barely stock at the Debary Inn, our place in Summit New Jersey -- charged up 30%.
Plant-based drinks are selling incredibly well in Europe and are just beginning to ramp up in China. What a story, and I am not even beginning to measure the power of plant-based yogurts, a category unto itself. Can you imagine a story constrained by not enough manufacturing capacity? Can you say bidding war among Danone (DANOY) and General Mills (GIS) come May, when the tax consequences of such an acquisition turn favorable? Count me in.
As fabulously as plant-based drinks are selling though, you have to just be enthralled by the numbers at Monster, the not-so-hot-for-you drink company that Coca Cola (KO) is in love with and expanding its ownership to 16.7%.
You've got double-digit sales for the product line, augmented by terrific 11.3% growth at convenience stores, one of the best low gasoline-cause and effect stories out there perhaps rivaled only by Cracker Barrel (CBRL) and maybe Hershey (HSY).
You have share take from former king of the category Red Bull in the U.S. and both these two now have a 34.8% share in the category with Red Bull going down and Monster going higher, in large part because of what looks to be an obliteration of rival Rockstar which is, definitively, no longer a rockstar.
Gross margins? Higher, as raw costs come down. New products? Taking more aisle space almost immediately. European growth? Strongest of all regions.
It's a remarkable story, you just have to deal with the notion that this company can co-exist, growth-wise at least, in your mind with WhiteWave.
The call was filled with humorous irony. How many of these presentations break up the sonorous boiler-plate at the start with the following caveat: "we reiterate that our products are safe. More than 13 billion Monster beverage energy drinks have been sold and safely consumed around the world over the past 13 years." You can bet WhiteWave doesn't have to put in that language.
While the old packaged goods companies struggle to put something, anything on their labels to signal a more natural and organic bent, Monster renames its M-80 product -- hardly peaceful to start -- as Ripper and lowered -- not raised but lowered -- its juice content, "which," the company points out "has improved their drinkability." Sometimes you have to wonder if Monster execs are in on the joke, because the company points out that sales of the product have shown "healthy" increases since the rebranding was completed.
I couldn't find a line in this call that wasn't improved, but perhaps the most intriguing one was expenses related to regulatory matters which went from $4.7 million last year to $2.9 million this year -- the windfall that comes from fewer journalistic intrusions into the health of the product. Hmm, maybe that's why you can rebrand a drink from the placid fireworks we used to set off when no one was looking to a drink that in its own quaint way celebrates the nickname of a well-known serial killer from a couple of centuries ago.
Yep, WhiteWave and Monster, two stocks that are on the move, two stocks that can still be bought, two stocks that are totally go-to when Greece flairs or China slows or the Fed raises rates. They may not share the cultures, but they share rising revenues and profits, so count me in to this explosive cocktail of better and faster living from plants and chemicals.
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