It's been an impressive run by Green Mountain Coffee Roasters (Nasdaq: GMCR ) lately.
After four consecutive trading days of strong gains, shares of the company behind the Keurig one-cup brewing system are trading 35% higher.
Last week the good news came in the form of upbeat analyst notes out of Lazard Capital Markets and Roth Capital. Introducing a Wellness Brewed line of K-Cups fortified with antioxidant vitamins and minerals also didn't hurt.
This week the catalyst has been Luigi Lavazza -- the Italian coffee giant that originally acquired a stake in Green Mountain two years ago -- boosting its stake. Lavazza and Green Mountain are teaming up to introduce a single-serve espresso maker in the U.S. later this year, so the increased ownership is an encouraging sign.
This won't necessarily be an easy market for Green Mountain to crack. Nestle's Nespresso is the top dog, but Kraft's (NYSE: KFT ) Tassimo and D.E Masters Blenders 1753's (NASDAQOTH: DEMBF.PK) Senseo are still in the hunt. Starbucks (Nasdaq: SBUX ) will also hit the market with its own machine later this year.
However, it could also be that Lavazza recognizes a bargain when it sees it. Despite worries of Green Mountain's K-Cup patents expiring this weekend, several analysts believe that the company will continue to grow its business.
Even after rallying 35% over the past four trading days, shares of Green Mountain are fetching a mere 10 times the projected profitability of its new fiscal year that begins next month.
The next few quarters will be critical, and the result will decide who gets the last laugh for a stock that has fallen hard over the past year even after its recent bounce.
Brew ha ha
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