Why Green Mountain Shares Cooled Off

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 Green Mountain Coffee Roasters (NASDAQ: GMCR  ) were tasting bitter today, falling as much as 10% after its guidance came in below expectations.

So what: The maker of the Keurig single-cup brewing system said it expected to earn $0.70 to $0.75 per share and $1.01 billion to $1.04 billion in sales in the current quarter. EPS was within range, but analysts were looking for $1.06 billion in sales. Notably, the company soared past earnings estimates, posting profits of $0.76 a share against the pros' $0.65 projection. Only the revenue guidance missed and by just a few percentage points.

Now what: The market still seems jittery from Green Mountain's 2012 collapse when the stock lost 85% of its value caused largely by its K-cups going off patent. Shares had been dearly priced beforehand, but the company has managed to grow steadily despite predictions of its demise. Today's early sell-off seems unreasonable, considering Green Mountain still sees 16% revenue growth this quarter. Clearly, some investors agree as the stock rallied back to just a 5% loss for the day.

Find out where Green Mountain is headed next by picking up a copy of our premium research report, which breaks down all the important details about the Keurig brewer. This report analyzes the company's opportunities and risks, and takes at looks at key areas to watch going forward. Best of all, it comes with a year's worth of free updates so you'll get the scoop on earnings reports and other important news. Get started with this exclusive new package now. All you have to do is click right here.


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  • Report this Comment On February 07, 2013, at 4:43 PM, Flygal5 wrote:

    No it dropped because I threw in the towel on my sort position :(

    When a sort squeeze ends look out!

  • Report this Comment On February 07, 2013, at 4:44 PM, Flygal5 wrote:

    The should be short position and short squeeze, sorry

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