Green Mountain Coffee Roasters - How high can it go?
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One of the fastest growing NASDAQ 100 stocks on Barchart has been Green Mountain Coffee Roasters (GMCR) which has been up over 248% in the last year. The company markets and distributes coffee using their K-Cup portion packs and acquired Keuring brewing systems under not only their own brand name but also under Newman's Own. They even distribute Starbucks and Dunkin Donuts brands. Agreements with Breville, Cuisinart and Mr Coffee have also increased sales.
Barchart technical indicators:
1 - 100% Barchart technical buy signal
2 - Trend Spotter buy signal
3 - Above its 20, 50 and 100 day moving averages
4 - 6 new highs and up 8.52% in the last month
5 - Relative Strength Index is 74.92% and still climbing
6 - Trades around 89.53 with a 50 day moving average of 76.84
Summary: Green Mountain Coffee Roaster (GMCR) has seen an almost 250% increase in price in the last 12 months. With a price earnings ratio of over 50 investors expect a lot. Total sales of coffee is not going to go up 40.90% next year which is the consensus figure for the stock's increase in sales. To maintain this growth rate they will have to rob others of their market share. I advice caution. If you don't have this stock already buy just a little, not a lot. If you own it, divide your holdings and put in stop losses at several price levels to protect your profits.
Jim Van Meerten is a Marketocracy Master