Great stocks tend to only look great over time. Over shorter periods, stocks can trade lower, or even sideways for prolonged periods of time. While that can be frustrating at first, taking advantage of that trend over time can lead to massive, market-beating gains.
That’s especially true for industry-leading stocks, which may sometimes stay out of favor with the market for some time before they finally start to make their next rally higher.
One industry leader is Monster Beverage (MNST). The energy drink producer has been one of the top performing stocks of the past quarter-century. And its products remain in favor with consumers, so that tend looks likely to continue.
Shares have been trending flat over the past few months, pausing with the stock up about 25 percent over the past year. The long-term uptrend looks likely to continue, as revenues are up 12 percent, and as the company has managed to keep profit margins at a healthy 21 percent.
Action to take: Long-term investors may want to start buying at current prices, and use any drop in shares to add to that position. Monster doesn’t yet pay a dividend.
For traders, the December $60 calls, last going for about $2.15, could see mid-to-high double-digit returns in the coming weeks on a break higher for Monster shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.