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Green Mountain Coffee Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of specialty coffee company Green Mountain Coffee Roasters (Nasdaq: GMCR  ) perked up as much as 22% Thursday after its quarterly results and guidance topped Wall Street expectations.

So what: Fueled by strong sales of its K-Cup portion packs, Green Mountain's third-quarter revenue more than doubled and earnings almost tripled to $0.37 per share. The stock is hitting all-time highs on the news, so Mr. Market obviously expects the positive earnings momentum to continue, but with the likes of Starbucks (Nasdaq: SBUX  ) , Tim Hortons (NYSE: THI  ) , and recent IPO Dunkin' Brands (Nasdaq: DNKN  ) up nicely today, Mr. Market is also taking Green Mountain's big beat as a positive sign for coffee stocks in general.

Now what: Expect the shares to keep rallying in the short term. For the fourth quarter, management now sees sales growth of between 100% and 105%, as well as an earnings range of $0.44 to $0.48 per share, versus the average analyst estimate of $0.43 per share. Green Mountain's lofty price ratios still make me nervous as a long-term investment, but if Keurig is truly, in CEO Lawrence Blankford's words, "changing the way North America brews and enjoys coffee at home and in the workplace," they may very well be justified.

Interested in more info on Green Mountain Coffee Roasters? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Green Mountain, Tim Hortons, and Starbucks. Motley Fool newsletter services have recommended shorting and creating a lurking gator position in Green Mountain. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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Brian D. Pacampara, CFA

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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Related Tickers

2/10/2016 4:00 PM
GMCR $89.98 Up +0.49 +0.55%
Keurig Green Mount… CAPS Rating: **
DNKN $40.57 Down -0.27 -0.66%
Dunkin' Brands Gro… CAPS Rating: ***
SBUX $55.14 Up +0.72 +1.32%
Starbucks CAPS Rating: ****
THI $0.00 Down +0.00 +0.00%
Tim Hortons CAPS Rating: ***