Celsius Energy Drinks.
- CNBC's Jim Cramer on Thursday reviewed two major players in the energy drink sector that have seen declines recently: Celsius and Monster.
- Cramer was more optimistic about Celsius' business and long-term potential, saying he'd buy the stock over Monster.
CNBC's Jim Cramer on Thursday reviewed two major players in the energy drink sector that have seen declines recently: Celsius and Monster.
Wall Street has loved this sector in the past, Cramer said, but in March and April the two stocks have "turned ice cold," along with many other growth stocks. But he was optimistic about Celsius' future performance, saying he'd buy the stock over Monster.
"Monster saw a small bounce when it reported, but mostly because it also announced a big buyback — I'm not particularly impressed with their latest numbers," he said. "Celsius, on the other hand ... gave us a noisy quarter that masked the true strength of the business."
Cramer said he wasn't impressed with Monster's recent earnings miss, saying he thinks the stock would have immediately sold off if not for the buyback announcement. Celsius also reported an earnings miss, but he noted that the company's margins grew higher than expected.
Celsius' management said its revenue loss came from "inventory movements" from PepsiCo, its largest distributor. While tighter inventory from PepsiCo isn't ideal, Cramer said he thinks Celsius will be fine moving forward because the rest of its business is solid.
Money Report
According to Cramer, there are a few more reasons to be bullish on Celsius. For example, the company continues to take market share in the sector. Cramer added the company has only just started to expand internationally, and this could be an upside for investors. He acknowledged that Celsius stock has started to rebound — finishing up 6.4% on Thursday — but said it's still a good time to buy since it remains down from its highs.
"At the end of the day, though, you want to own shares of the company that's taking market share like Celsius, not the ones that are losing share like Monster," he said.
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Celsius declined to comment, and Monster did not immediately respond to request for comment.
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