Why Green Mountain Coffee Roasters Inc. Stock Soared

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 (UNKNOWN: GMCR.DL  ) were heating up today, climbing as much as 19% today on a strong fourth-quarter report.

So what: Results for the maker of the Keurig countertop brewing system soared past estimates with per-share earnings of $0.89 against expectations of $0.75, as revenue grew 22% to $1.05 billion, topping the consensus at $964.6 million. Brewer sales increased from 2 million in the quarter a year ago to 2.6 million, while portion-pack sales improved by 11%. Portion packs make up nearly three-quarters of the company's revenue, but the growth in brewer sales is key as it helps to ensure greater demand for the K-Cups going forward.

Now what: Green Mountain also delighted the market with an increased share-buyback program of up to $1 billion, and the introduction of a quarterly dividend of $0.25, equal to a 1.4% yield. Finally, the company predicted high-single-digit revenue growth for the coming year, and earnings of $3.75 to $3.85 per share, both in line with estimates.

After last year's stock stumble, today's report seems to assert yet again that Green Mountain has put the previous patent cliff and accounting concerns behind it. This is a stable company with solid growth ahead of it, and the recent dividend announcement confirms management's focus on returning capital to shareholders. The dividend should also help quiet the short-sellers, who have been trashing Green Mountain, to little avail now, for several years.

Looking for more growth stocks?
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.

Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 21, 2013, at 5:42 PM, foolmjm2013 wrote:

    hey its nice to hear honest comments on GMCR.

    can you make this available to Einhorn.

    that guy is the most insulting idiot I have been exposed to in the past 10 years.

    why is it that holding such large short positions in GMCR legally would allow him to try to build his own market by constantly trashing GMCR?

    odd that no one has sued him or taken an interest in reporting his behavior to the SEC.

    hopefully GMCR will continue on its path and make people like him eat his words and explain away his idiocy to his clients when they lose more money.

    the guy makes a few lucky calls and suddenly people pay attention to him, that's too bad

    he reminds me of a fly at a picnic

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2738290, ~/Articles/ArticleHandler.aspx, 9/25/2016 6:57:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
GMCR.DL $0.00 Down +0.00 +0.00%
Keurig Green Mount… CAPS Rating: **