The Best Stock Over The Past 25 Years

You would probably assume that Apple’s rise to become a $3 trillion market capitalization company cements its holding on the title of the best performing stock over the past quarter century. If not Steve Jobs’s firm, surely Microsoft holds the top spot as the largest company by valuation in the S&P 500 today?

It turns out neither company has the title, and nor does Amazon, Netflix, Meta or any other high flying technology stock you might naturally think of as contenders.

Instead, the best performing stock over the past 25 years is, drumroll, Monster, with a 117,000% plus return. The energy drinks maker has brought shareholders on a rollercoaster ride with roaring success.

The Monster story is written but is there another energy drink maker that may potentially be on the cusp of replicating its success?

Key Points

• Monster was the best performing stock over the past 25 years, tacking on a 117,000% plus return, eclipsing the gains of tech giants.
• More recently, Celsius Holdings has been on a growth tear, posting massive top line and bottom line growth figures.
• Analysts still consider Celsius a buy with upside potential, and multiples are not as lofty as they appear at first glance.

1 Drinks Maker with Enormous Potential

These days, another drinks manufacturer, Celsius Holdings has ambitions to emulate Monster’s success. The company has posted numerous triple-digit percentage revenue growth rate quarters over the past 3 years and is now sitting on over $700 million in cash to fuel further growth.

It’s also finally reporting impressive profitability figures. Whereas just 3 years go, EBIT was flat to negative, the most recent quarterly report came in just shy of $100 million.

It’s that kind of top and bottom line growth that has garnered Wall Street’s interest and kept the stock moving higher, to the tune of almost 100% over the past year alone.

But is the stock still a buy?

Is Celsius Stock a Buy?

If you were to look at the standard multiples for Celsius, they appear downright concerning. The price-to-earnings multiple sits north of 125x while the price-to-sales is over 12.5x.

Interestingly, though, the growth rates may in fact suggest these multiples are not as outlandish as they first appear. For instance, the PEG ratio, which is generally viewed as a good benchmark for an undervalued stock if below 1.0, now sits at 0.75x. That infers the company is cheap on an earnings multiple basis when growth is factored in.

Should Celsius grow by 100% a couple of times over the next 5 years, the price-to-sales ratio would rapidly compress from 12x to 3x, a very reasonable level.

Clearly, Wall Street is baking in massive growth still for the firm and perhaps that’s where the largest risk lies. Any mis-step will no doubt be severely punished. For now, though, analysts see upside of around 12% in spite of the massive growth already experienced in the past year. With all that said, a DCF analysis is more pessimistic and places fair value about 15% lower than the current share price, so on a pullback it will look even more attractive.