Green Mountain Coffee Roasters, Inc. (GMCR)

clicked the wrong button. this is supposed to be an underperform

The biggest of the bubbles in the "coffee bubble" sector.

With a new acquisition,they have diversified themselves and raised outlook will help overall price in a short term.Long term it is too pricey.It will need a few more catalysts.I am not looking to marry this stock I am planning a max of 6 weeks and a return of approx.10%

terrible coffee

*optional*

Green Mountain Coffee has not hit its peak yet. It still has room to grow. It has a small company feel with dedicated owners and excellent products with big company profits

This account tracks the fast-growing shakers and movers and some of the riskier stocks on my watch list.

I dont see the cash flow supporting this.
200 mil equity with mkt cap of 2.8 bln ?
in order to grow they will need to rais capital isnt ?
why all the insiders sell ?

I would be selling into earnings in November. While this is a great company and their growth rate is higher than almost any publicly traded company in existence, it still trades at 56.9x (as of today 10/1/09) earnings even after today's 4.12% selloff and has run up to an all time high before today. Take your profits, wait for the stock to get to 50x earnings by the time they report next quarter, and monitor the conference call for any signs of slowing down. Stocks that trade as high p/e as this one are extremely risky when earnings are reported; one bad quarter and down down down it goes. Given how bad the economy has been, I would take the profits. If earnings are great in November, then start rebuying. But with no new brewers in the mix and the company's focus on integrating GMCR/Keurig with Tully's and making the brand a national company, this earnings report will be critical, and I would be taking profits into the quarter. Another option is to sell enough shares to take back your original dollar investment and only have the leftover shares going into earnings, that way if they continue to blow out you still catch it while limiting your downside risk on your original investment.

Where's the cash flow to support 2.8B market cap?

time to go down!

8 Wall street analysts are following this stock and generally agree that it'll get something on the order of 55% growth for FY10. These guys have seen everything you've seen (and possibly more), including management forcasts.

The world in general has seen management forcasts and everything you've seen. They've tagged it around a P/E of 55, meaning they expect something on the order of 55% growth.

ROS, ROA, ROI show nothing that special to justify this valuation.

And you think this stock hasn't got all of the potential upside built into its price? What do you know that the rest of us don't? This isn't an obscure stock that gets no coverage. And in a rising market, it's gonna out-perform while selling high priced coffee in this economy?

No.

R

The recession is pressuring the fu fu coffee crowd, but GMCR's k-cup system is keeping it afloat. It's managed to grow through this mess, and the stock should do nicely when the surviving coo-coo for caffiene stocks as a whole recover.

Company is in growth mode. It continues to expand its product line and distribution capacity. The company is "green". Most important, the products it sells are of the highest quality and taste great!

will not grow into this PE. Go ahead, keep fooling yourselves while you're standing there in the crocs you bought when crocs was flying high.

Green Mountain Coffee Roasters is piping hot!

The US consumer is currently tightening their belt, losing their jobs, and hunkering down to rebuild their retirement funds. Based on the numbers reported by Green Mountain Coffee Roasters (GMCR), buying a coffee machine seems to be the first step on the road to economic recovery for the American consumer.

As a budding short seller, this stock seemed like a prime candidate to profit from as expectations hit the rocks of reality. At first glance, GMCR holds all the initial signs of a momentum stock out of control. GMCR currently holds a $2.2B market cap and a 47 P/E ratio in a market with declining consumer spending across the board. Yet by the end of the analysis, GMCR looked like a coming with a full head of steam with more upside than downside. Here is why....

* GMCR products achieve great customer satisfaction

“During the quarter, we reconfirmed that consumers remained extraordinarily satisfied with the Keurig brewer system. Our quarterly research reconfirmed a top two box satisfaction score that exceeded 92% for all brewer models.”

“Our outlook for fiscal 2010 anticipates a net sales growth rate of 45% to 50%, shipments of system wide K-Cup portion packs to increase in the range of 65% to 70% and fully diluted GAAP EPS to be in the range of $1.70 to $1.80 per share.”(1)

* GMCR has solid organic growth

[Q3 2009]
“It certainly was another outstanding quarter for Green Mountain Coffee Roasters. Net sales totaled $190 million, up 51% over the last year with each business unit contributing strong sales growth. After inter-company elimination, the Keurig business unit net sales were up 97% to $90 million and the Specialty Coffee business unit net sales were up 39% to $100 million. ….
The primary driver of the increase in net sales is the continued growth in K-Cup sales which were up over 79% on a consolidated basis. Sales related to the Tully's brand represented approximately 5.5% of the 61% increase in consolidated net sales and are included in the Specialty Coffee business unit results for the first time.”(1)

* GMCR is rapidly developing new channels for growth and market penetration

“In our third quarter we announced two new licensing initiatives. We licensed Con-Air Corporation to launch a Cuisinart branded Keurig brewed coffee maker during the first half of 2010. We also licensed Jardan to launch a brewer under its Mr. Coffee brand expected during the second half of 2010.

These initiatives are consistent with our fundamental razor blade approach to growing the business which focuses on getting brewers into more households in part by providing consumers with more looks, features, brand choices and price points. Both product lines will be co-branded with Keurig and designed to work with the 200 varieties of gourmet coffee, tea and hot cocoa packaged in Keurig's patented K-Cup portion pack.

With Keurig, Cuisinart, Mr. Coffee all offering Keurig brewed technology, we are seeing to maximize the visibility of Keurig and expand choices for the consumer, thus accelerating the adoption of single cup brewing into homes across North America.”(1)
http://seekingalpha.com/article/159545-lone-pine-challenges-shorts-with-green-mountain-coffee-stake

* GMCR signed deal to sell in Wal-Mart

Wal-Mart is a huge new retail relationship for GMCR to sell the Keurig systems. Although Wal-Mart has a track record of cutting margins on the units it sells, GMCR makes most of their money through the proprietary K-Cup they sell. The Keurig system requires using the K-Cup to function and the owner must keep a supply of cups on hand.

* GMCR has attracted hedge fund interest [Look out for the squeeze, short sellers!]

“In a 13G filed with the SEC, Stephen Mandel's hedge fund Lone Pine Capital has disclosed a brand new position in Green Mountain Coffee Roasters (GMCR). The filing was made due to activity on August 19th, 2009 and Lone Pine now shows an 8.3% ownership stake in the company with 3,603,364 shares.”

Finally, it is very difficult to estimate how much impact all of these new initiatives will have in total. But I am confident that GMCR will have ample opportunity to blow away current sales guidance. That is information that should make any short seller pack up and go home. Or just buy a few shares and go along for the ride.

(1) GMCR, Q3 2009 Results Conf Call Transcript

For updates to this pitch, graphs, pictures and additional information go to my blog at ->

http://lockstep-investing.blogspot.com/2009/09/gmcr-is-piping-hot.html

Good coffee, but I'm not paying this much for their stock.....

It certainly makes sense that this small Vermont coffee roaster's market cap is only slightly under Del Monte's. *syke*

GMCR is redefining how coffee is delivered in this country. In the past decade, over 2 billion K-Cups have been sold, and the company is just beginning to penetrate the mass retail channels like Walmart, Costco, and others. This company continually outperforms, and is heavily shorted, so that when it does move, it tends to be dramatically to the upside. Every time I have sold this company it has been a mistake. Buy, and hold.