The Monster Beverage battle—a bull or a bear?

Can Monster keep chugging higher?
Can Monster keep chugging higher?   

Whenever a stock skyrockets in the middle of a stock market plummet, Jim Cramer's attention is piqued.

Such was the case with Monster Beverage, which rallied 4 percent on Wednesday. This stock was caught in an analyst gunfight, when Wells Fargo downgraded it to market perform from outperform. Then Stifel raised its price target to $130, and Cowen upgraded it to outperform from market perform with a $140 price target.

Monster was downgraded and upgraded all at the same time. What gives?

"When you're dealing with a hot stock, and you have dueling analysts, or in this case a three-way Mexican standoff, it always pays to take a look at both sides of the story so you can figure out whether the bulls or the bears are right," the "Mad Money" host said.

A variety of Monster Energy drinks are shown in Washington.
Karen Bleier | AFP | Getty Images
A variety of Monster Energy drinks are shown in Washington.

On the upside, Coca-Cola recently acquired a 16.7 percent stake in the company with an option for more. Additionally, the stock has seen a tremendous gain of 67 percent in the past six months alone.

In the case for the bears analysts at Wells Fargo agreed that Monster is a strong beverage company, but feared that the stock may have become too expensive given that it is currently trading at 36 times earnings. Cramer agrees. However, that does not mean that the stock can't go higher!

Additionally, Wells was concerned about the distribution shift of its product. Monster is about to transition approximately half of its volume to Coca-Cola's distribution channels and are concerned this could cause a disruption to its current flow.

In the case of the bulls for Monster, Stifel and Cowen are really excited about Coca-Cola's distribution platform because it will give the company greater access globally. Currently, international only represents 22 percent of Monster's sales.

Stifel is excited about the opportunities that could be presented in both Latin America and China and thinks the company could more than double its market share to 12 percent of the international energy drink market.

Additionally, Stifel expects Monster to pull a 4 percent to 6 percent price increase in the U.S. once the Coca-Cola transaction is complete. If that is the case, then revenue growth and earnings per share could rise dramatically.

This is exactly why Cramer has been recommending the stock for months. Coca-Cola could increase its stake at any time, even up to 25 percent, and that would make it even more attractive.

"The growth-starved Coke could simply acquire the whole darned company—I think that would be a brilliant move, and it wouldn't surprise me in the least," Cramer said.

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Ultimately the "Mad Money" is betting on the bulls for Monster. It might be a bit expensive, but there are so many good developments happening that he thinks it could be headed higher.

"If you owned this stock since I recommended it in the $60s, then I bless ringing the register and playing with the house's money."

If not? Cramer wants you to get in on this hot stock on the next marketwide selloff. Hopefully, by that time Monster will have a pullback and create the perfect entry point.

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