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 coffee maker and premium coffee retailer Green Mountain Coffee Roasters (Nasdaq: GMCR ) popped as much as 13% following optimistic notes from two brokerage firms.
So what: Earlier today, Lazard Capital initiated coverage on Green Mountain with a buy rating and a $39 price target. The covering analyst, Matthew DiFrisco, noted that while Green Mountain's growth rate is slowing from a hyper-growth rate, there's minimal downside in its share price. Similarly, analyst Anton Brenner at Roth Capital noted that the negativity surrounding the release of private-label K-Cups has been factored into the reduced share price already. Roth Capital maintained its buy rating on the stock and a $35 price target.
Now what: Even if we like the result of these analysts' comments, I can't help but point out -- yet again -- that one-day pops and drops from brokerage comments are rarely worth changing your investment thesis over.
What I can say about Green Mountain that does happen to coincide with both firms' analysis is that Green Mountain does appear cheap given the risks presented. As I noted in my roundtable discussion on Green Mountain with fellow Fools Alex Planes and Travis Hoium, the company has K-Cup partnerships with Starbucks (Nasdaq: SBUX ) and Dunkin' Brands (Nasdaq: DNKN ) which provide a steady source of growth. It will face private-label K-Cup competition from Kroger's (NYSE: KR ) grocery stores this month and will contend with a coffee-making machine from Starbucks, the Verismo, at some point later this year, but it appears to have a strong enough brand presence and growth rate to easily justify its current valuation.
If you want the full scoop on Green Mountain Coffee Roasters and not just a day's worth of analyst noise, then get your copy of our latest premium research report on Green Mountain. This report will give you the skinny on the long-term opportunities and pitfalls that could move this stock, and comes complete with a full year of regular updates. Get this report by clicking here, and claim your investing edge.