Stocks in the News: AMA Pushes Energy Drink Bans

Posted: Jun 27, 2013 12:01 AM

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis. 

Stock number one is: 

V.F. Corp., (SYMBOL: VFC) and the headline says:

Deutsche Bank Starts with Buy Rating; Price Target $215 -- Reuters

Deutsche Bank began coverage of V.F. Corp. yesterday, the maker of Wrangler, Lee, The North Face and Timberland apparel, with a buy rating.  The stock has been rising steadily for over four months and reached new highs today.

Wall Street projects V.F. Corp to grow earnings 12-13% per year for the next three years.  The PE is 17.6, which is high in its normal range of 10-19.

We recommended V.F. Corp. three times since February, and the price is up $34 since then.  We think that new investors have missed most of this year’s price run-up.

Our Ransom Note trendline says:  HOLD V.F. CORP.

Stock number two is

Mosaic Company, (SYMBOL: MOS) and the headline says:

Cargill family blocks Mosaic early-buyback plan – Minneapolis St. Paul Business Journal

Mosaic Company, global supplier of phosphate and potash crop nutrients, disappointed Wall Street by announcing a significant delay in upcoming share repurchases from the Cargill trusts.  Investors were expecting the buyback to boost earnings per share.  In addition, weakness in the Indian rupee and other southeast Asian currencies is hurting expected revenues.

Earnings per share are slated to fall this year.

Citi Researchdowngraded the stock to Neutral, and dropped its price target to $57.  Mosaic has traded between $55 and $64 since December, and is flirting with breaking through support levels today.

Our Ransom Note trendline says: STAY ON THE SIDELINES.

Stock number three is:

Monster Beverage Corp., (SYMBOL: MNST) and the headline says:

S&P Reiterates Sell Recommendation on Shares of Monster Beverage Corp. – Standard & Poor’s Research

The American Medical Association is recommending banning the sale of energy drinks to people under age 18.  Monster Beverage Corp., formerly Hansen Natural Corp., is a leading maker of energy drinks, and a target of two wrongful death suits.

Monster’s earnings are expected to grow 13, 19, and 19% over the next three years.  The PE is high at 27.

The stock is on an uptrend, trading between $55 and $63.  Be wary of a sudden price drop related to litigation or falling sales.

Our Ransom Note trendline says:  HOLD MONSTER BEVERAGE.