Green Mountain Coffee Roasters, Inc. (GMCR)

Just For Fun

Think past the current market down trend and think about what could be in the future for GMCR if everything clicks and the Keurig remains the brewer of choice. Currently, there are approximately 20 million gourmet coffee drinkers in the US. If GMCR were to obtain 50% market share that would be 10 million brewers. The average at home brewer pops 2 1/4 K-Cups per day. Do the math and you have over 8.2 billion K-Cups per year. If you use .35 cents per K-Cup you get annual revenue of $2,874,375. Say they bring 12 percent to the bottom line. That would be 344 million net profit per year. Use a multiple of 35 because it is an excellent reoccurring revenue and profit stream. That would give Green Mountain a market cap greater than 11 billion dollars. But wait, there is more. There is the rest of the Green Mountain business, the offices, hotels, Mickey D’s, Exxon Mobile, grocery stores, etc. Don’t forget International. The business outside of the US could easily double the numbers. Price increases will add to the top line too.

Before you say, “What is Jawz smoking”, consider this. The MP3 market has many market participants. Along came a killer application called IPOD and it took the market over. What is the IPOD market share now? Last I heard it was over 80 percent. Look at what they have done with the I-Phone too. In less than a year they have captured 20% of the smart phone market with over 4 million I-Phones sold. Why did Apple do so well? Because they have products that are simple, elegant, easy to use and consumers love them. Sound familiar? Green Mountain and their partners are revolutionizing the way people drink coffee.

IMHO this stock is just starting an incredible growth phase.

GLTA