Beverage Stocks That Quench The Thirst Of Investors

Warmer weather is approaching and the summer season is getting ever closer. In the month of May, many investors are remembering the old market saying „Sell in May and go away“- and are contemplating their positioning during the summer months. In one of our past issues of Seasonal Insights, we have analyzed this phenomenon in detail by analyzing the half-year results of the eleven largest stock markets by market capitalization. The study underscores that seasonal weakness in the summer months - also known as the “Halloween Effect” - indeed exists.

However, are there still hidden gems that can be found in this time period? Or the whole industry has gone short?

The Beverage Study

It can be safely assumed that the stock market is on average significantly weaker from May until the end of October than during the rest of the year. But there are still several sectors that are benefiting substantially from the upcoming summer season, and one of them stands out in particular.

According to Slice Intelligence, the summer and winter seasons have a significant impact on the annual sales of various beverages. In the warmer months, sales of energy drinks, sport drinks, soft drinks, and beer increase. During the winter season there are spikes in tea, wine, and spirits consumption. These trends can be clearly seen in the chart below.

(Click on image to enlarge)

wine and sports drinks are the most seasonal beverages

Source: Slice Intelligence

Beverage Stocks on the Radar

Energy and sports drinks are definitely becoming a summer staple and Monster Beverage Corporation (MNST) is an outstanding representative of this product category.

Monster Beverage Corporation is an American beverage company that manufactures energy drinks including Monster Energy, Relentless, and Burn. According to T4's market research team Monster held nearly 39% of the $57 billion US energy drinks market in 2020.

Seasonal Chart of Monster Beverage Corporation over the past 10 years

(Click on image to enlarge)

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