Foolish Forecast: Hansen Will Shock You

Energy-drink giant Hansen Natural (Nasdaq: HANS) is set to report first-quarter earnings on Wednesday night. Is this a potent brew like last quarter, or a slightly sour batch like the period before that? Let's find out.

What Fools say:
Here's how Hansen's CAPS rating stacks up against some of its peers and competitors:

	Market Cap (Billions)	Trailing P/E Ratio	CAPS Rating (Out of 5)
Coca-Cola (NYSE: KO)	$135.6	22.0	****
PepsiCo (NYSE: PEP)	$108.8	19.8	*****
Cadbury Schweppes (NYSE: CSG)	$107.6	33.5	****
Hansen Natural	$3.3	21.8	****
Jones Soda (Nasdaq: JSDA)	$0.08	N/A	**

Data taken from Motley Fool CAPS on 5/6/08.

Among our Motley Fool CAPS players, Hansen has a great buzz going right now. The last negative comment on the stock came from All-Star player east54 on February 1: "unemployment reduces discretionary spending."

Since then, 32 positive CAPS comments have poured in to cement the stock's respectable four-star rating. Among them, you'll find another All-Star under the moniker sandvig, who offers this analysis of Hansen's fundamentals: "There are a few things that have me charged up about HANS. They have a monster ROE, no debt, steady growth, and good cash flow."

What management does:
Hansen has turned around negative margin and growth trends, thanks to highly cost-efficient distribution agreements with Anheuser-Busch (NYSE: BUD) in the U.S., Cadbury in Latin America, and Pepsi in the Canadian market.

Margins	9/06	12/06	3/07	6/07	9/07	12/07
Gross	52.2%	52.3%	52%	52.2%	52.2%	51.7%
Operating	27.6%	26.2%	23.9%	23.1%	24.9%	25.3%
Net	17%	16.2%	14.9%	14.5%	15.6%	16.5%
FCF/Revenue	15.7%	12.2%	15.1%	13.7%	12.2%	14.5%

Y-O-Y Growth	9/06	12/06	3/07	6/07	9/07	12/07
Revenue	83.4%	73.6%	59.5%	54.5%	46.5%	49.3%
Earnings	82.3%	56%	29.4%	21.8%	34.3%	52.5%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
All that's missing now is some sort of distribution deal in Europe, where local hero Red Bull reigns supreme, and in the Far East, where I suppose Pocari Sweat and Yunker Fanti could use some competition.

I've said this before, but it's worth repeating: Hansen should consider expanding its board by a couple of seats and bringing in some top-notch retailing talent to help guide the company through the next phase of its maturation. Hansen is growing up quickly, and it could really benefit from proven logistics experience in its steering committee. These guys already have business partnerships with Anheuser and Pepsi -- why not ask a couple of their operating executives to lend a hand?

Be that as it may, this quarter won't be terribly exciting. The costs of production are rising because ingredients are getting expensive, as is the fuel required for distributors' trucks -- and this is historically a slow quarter for energy drinks. Hansen has been hit-and-miss versus analyst projections lately, and it could tip either way this time, too.

For long-term investors like me, I'd advise waiting for the report and making an informed investment decision once the numbers are in.