Keurig Green Mountain, Inc. (NASDAQ:GMCR)

CAPS Rating: 2 out of 5

The Company together with its subsidiaries is engaged in the specialty coffee industry.


Player Avatar FooliRay (55.83) Submitted: 6/8/2012 10:42:45 AM : Outperform Start Price: $23.97 GMCR Score: +136.95

I'm going back to the till on this one. It could get worse but is worth a shot here. Even Einhorn's short thesis implied a $3.50 EPS for GMCR. Even if he's off by 25% ($2.40) it still implies a P/E of 10.

The patent expirations are going to ding earnings, but aren't going to destroy the business! In fact, lower pod prices may cause more homes & small offices to adopt single-serve as it will be more affordable.

SBUX is very careful about their single-serve plans and still needs GMCR right now. If this stock drops too much, it would probably make sense for SBUX to acquire GMCR.

If the SEC investigation yields "worst-case" results, then I'm in for some pain here.

Definitely worth a nibble...

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