We recently published a list of 7 Best Sugar Stocks to Buy According to Analysts. In this article, we are going to take a look at where Monster Beverage Corporation (NASDAQ:MNST) stands against other best sugar stocks to buy according to analysts.
The global food and beverage sector depends heavily on the sugar industry, which supplies a vital component for everything, from packaged meals and drinks to confectionery products. While traditional sugar production has been a reliable source of income for many years, new developments in alternative sweeteners, regulatory restrictions, and consumer tastes have changed the market and created new avenues for expansion and investment.
The demand for sugar remains high despite fluctuations in the global supply. The most recent World Agricultural Supply and Demand Estimates (WASDE) study projects that reduced cane sugar yields will cause U.S. sugar output to drop to 14.39 million short tons in the 2024–2025 season. Similarly, Mexico’s sugar output forecast has been lowered, mostly because of lower harvest quantities and a slower rate of sucrose recovery. However, rising middle-class populations in developing nations, increasing consumption of processed foods, and the ongoing demand for sugar-based goods, all contribute to the world’s rising sugar consumption.
Nevertheless, conventional sugar production is no longer the only focus of the sugar industry. A shift is occurring as health-conscious consumers actively seek healthier alternatives. About 35% of all non-alcoholic beverage releases in the last year featured no-sugar or low-sugar formulations, according to a GlobalData report, indicating that sugar reduction claims have taken center stage in the beverage industry. Major food and beverage companies have been forced to diversify as a result of this change, looking into sugar substitutes and natural sweeteners. As a result, companies are keen to meet the changing demands of a more health-conscious population, which is leading to increased investment in the sugar sector.
Therefore, companies are coming up with innovative ideas and solutions in response to these shifts, such as plant-derived sugar substitutes or artificial sweeteners. Large multinational corporations are growing their lower-sugar product lines, indicating a more significant change in the sector.
In addition to food and beverages, sugarcane and sugar beets are essential to the biofuel sector. More than half of Brazil’s sugarcane harvest is used to produce ethanol, making it the world leader in sugar-based ethanol production. This need is only likely to increase in the years to come. Sugar is a renewable energy source that is becoming increasingly important as the ethanol industry grows. Hence, sugar is an essential part of the global economy, extending beyond food and beverages, as sugar compounds are utilized extensively in industrial, medicinal, and cosmetic products.
While certain companies integrate sugar-based components into a wider range of products, others make significant profits from conventional sugar production. Thus, selecting the correct stocks is essential for investors hoping to profit from the rapidly evolving sugar sector.
Methodology
To compile our list of the 7 Best Sugar Stocks to Buy, we first identified companies operating in the sugar industry, including those involved in sugar production, sweeteners, and sugar-related ingredients. We focused on stocks with strong market capitalization and a notable presence in the sector.
Next, we analyzed institutional interest by determining the number of hedge funds which hold a stake in the company, as of Q4 2024. Hedge fund ownership data was sourced from Insider Monkey’s hedge fund database, which tracks the activity of over 1,000 hedge funds. A higher number of hedge fund holders often indicates confidence in a company’s growth potential and stability.
To assess the potential upside, we gathered analyst forecasts from credible sources. The highest projected upside for each stock was taken into account to ensure an accurate representation of growth expectations. Finally, we ranked the stocks based on their potential upside in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A shelf filled with a variety of bottles of energy drinks, juices, and sodas in a convenience store.
Monster Beverage Corporation (NASDAQ:MNST)
Upside Potential: 6.00%
Number of Hedge Fund Holders: 52
In the energy drink sector, Monster Beverage Corporation (NASDAQ:MNST) has made a name for itself by providing a variety of drinks that satisfy consumers who choose sugary or sugar-free options. Analysts rank Monster as one of the top sugar stocks to purchase due to its strong presence in the energy drink market and growing product lines, indicating its remarkable growth potential.
For Q4 ended December 31, 2024, Monster Beverage Corporation (NASDAQ:MNST) reported record net sales of $1.81 billion, a 4.7% rise from the prior year, despite challenges from unfavorable international exchange rates. Due to strong demand, sugar-based beverages, especially Juice Monster and other full-sugar products, continue to be a major source of income for the company. Monster’s growing range, which includes new flavor releases such as Ultra Vice Guava, Viking Berry, and Blue Hawaiian, demonstrates its capacity for innovation. Additionally, the company’s debut in the coffee industry with products like Loca Moca and Killer Brew Mean Bean strengthens its position in the market.
Monster Beverage Corporation (NASDAQ:MNST) has maintained a solid position in the energy drink industry despite intense competition. Furthermore, by entering the alcoholic beverage industry and introducing new products under the Beast brand, Monster extends its market reach and opens up another potentially profitable revenue stream.
All things considered, Monster Beverage is well-positioned for future expansion and success thanks to its unwavering focus on product innovation, which includes both sugary and sugar-free options. Monster continues to be a major force in the energy drink market and an alluring option for investors hoping to profit from the sector’s rapid growth, thanks to its solid business strategy and steadily rising demand for its drinks.
Overall, MNST ranks 6th on our list of best sugar stocks to buy according to analysts. While we acknowledge the potential of MNST, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MNST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.