Green Mountain Coffee Roasters
Shares of the company behind the Keurig single-serve coffee system have climbed 28% in September and are actually trading more than 80% higher since hitting their summertime low.
CEO Larry Blanford was interviewed in yesterday's The Wall Street Journal, sharing his perspective on everything from David Einhorn's timely bearish bet on the company to Starbucks'
There weren't a lot of surprises, until the end of the piece, when he discusses its own espresso-centric machine that will roll out either late this year or early next year in cahoots with Italy's Lavazza.
"It is a single-serve espresso machine with a twist or two that we think will make it very interesting to the consumer."
There is no shortage of espresso makers on the market. Starbucks and Green Mountain aren't exactly breaking new ground here. Nestle's
The machines may be more popular in European markets, where espresso is more widely consumed than the traditional filtered coffee that made Keurig such a big hit domestically.
What will this "twist or two" be, and will it be enough to finally get folks to buy high-pressure java makers in this country?
If the twist is that it will also accept K-Cups and Vue portion packs, the consumer appeal will be obvious. Now that Green Mountain's K-Cup patents expired over the weekend, portion packs for Keurig's flagship brewer are about to get cheaper. The already impressive variety relative to other platforms is about to get even more varied.
It seems unlikely, but it would definitely be a game changer.
Either way, Blanford still sees the company growing at a 15% to 20% annualized clip in the future. It may seem lofty, but good things will obviously continue to happen for Green Mountain if he's right. The stock is fetching less than 14 times Wall Street's profit target for the fiscal year that ends next week. Green Mountain is trading for just 12 times the fiscal year that starts next month.
As long as the twists that Green Mountain experiences are positive ones -- and that's no safe bet -- the stock will continue to claw its way back.
Brew ha ha
With Green Mountain as cheap as it's ever been, many investors are wondering whether this is the end of the former market darling, or the perfect entry point for an enormous rebound. You can find our recommendation for how to play the company in our new premium research report. In it you'll find everything you need to know about Green Mountain, including whether it's a buy at today's prices. Click here for instant access.