Monster Joins the S&P 500 as Sara Lee Steps Down
Energy fuel company Monster Beverage (NASDAQ: MNST) will be taking the place of Sara Lee (NYSE: SLE) in the S&P 500 Index after the close on June 28th. The longtime American food brand will be swapping places with Monster following its decision earlier this month to become absorbed under the Hillshire Brands (NYSE: HSH) name.
Sara Lee will step down onto the S&P MidCap 400 Index come Thursday, as its anticipated coffee and tea spin-off agreement is expected to be made final that day. D.E. MASTER BLENDERS 1753 is set to begin operating Sara Lee's beverage business next week following the June 1st announcement that the company would be separating its household products, meats and baked goods from its brews.
As one beverage maker takes a step down, another will reign in its place. Monster's transition into the big leagues solidifies that the company will be going up against the most prevalent beverage competition in the world, with The Coca-Cola Company (NYSE: KO), PepsiCo (NYSE: PEP) and Dr. Pepper Snapple (NYSE: DPS) being just a few renowned names that the drink distributor will soon join on the S&P 500 Index.
The transition comes at a time when Sara Lee has been experiencing lackluster sales and Monster Beverage is continuing to ignite the interest of investors worldwide.
"Monster has experienced strong sales and profit growth since going public in 1995, as Americans guzzled down its namesake energy drink, a blend of sugar and Vitamin B packaged in tall-boy cans streaked with claw marks. Meanwhile, Sara Lee suffered. Sales fell from $17.6 billion in 2002 to only $8.7 billion last year," Forbes recently reported.
In the beginning of June, Monster's sales were up 28.3% with no signs of crashing. Goldman Sachs maintained that the growth was incredibly encouraging and exceeded the firms forecast as the brand continues to be on the up and up.
Replacing a business in transition with a more lucrative and stable company may be the best decision for all parties involved in the flip-flop. Regardless of the outcome, it will certainly be refreshing for investors and analysts to see Monster Beverage on the S&P 500 next week.
Monster is currently up about 2.5% in pre-market trading at $76.58, while Hillshire Brands closed yesterday at $28.25, up approximately 10% year-to-date.
Latest Ratings for MNST
|Dec 2014||RBC Capital||Downgrades||Top Pick||Outperform|
|Nov 2014||Longbow Research||Assumes||Neutral|
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