Green Mountain Coffee Roasters, Inc. (NASDAQ:GMCR)

outperform

Getting near its peak, watch out

I'ts the same as all the people who asked themselves this question:
"Why didn't I think of the egg carton 1st?

earnings and sales are going to go through the roof with the k-cups

good company

please, way overbought.

GOOD COFFEE

GMCR has sold nearly 1.2 M machines in the last six months alone. This is the classic razor and blades play. They not only sell their own brand, but receive .064 cents for each K-Cup that any other brand sells. This is huge. The deal with Wal-Mart also opens the floodgates for those consumers that were holding back because they could not buy the K-Cups at their local supermarket. Starbucks, watch out!

too high

Overpriced

Trending, strap in and ride

beware the coffee bubble....

As long as the economy is in the tank, this will be a valuable stock. One must remember to buy only on the dips and ride it for a few weeks. Wait for the market to begin the coming sell off with high volume before unloading.

What goes up must come down. With the relentless climb that this stock has experienced, most of the shorts have most likely been forced out of their positions. So without an earnings beat tomorrow or some very positive forward looking statements, I think some of the longs will abandon ship and some of the squeezed shorts will reenter their positions. If they miss earnings tomorrow I think that this stock could easily drop $10 or more since the float is so small.

I have a personal bias in favor of GMCR. Nothing more, nothing less.

short interest divergence

This company is way overpriced in terms of the current market. But don't believe me, listen to the 20 insiders who recently dumped nearly a million shares. The market for high-priced non-essentials is tanking, which will cut their retail revenues, while a horde of plant and office closings and a weak travel market will decimate their commercial and hospitality business. I wouldn't be surprised to see this stock in the teens inside of two years.

Green Mountain's primary market is selling to corporations, hotels and the individual consumer for home brewing. Much more compelling market in the current economic environment then more expensive alternatives. 300% yoy growth and positive eps revisions from analysts helps as well.

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