Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty coffee company Green Mountain Coffee Roasters (Nasdaq: GMCR ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Green Mountain's business and see what CAPS investors are saying about the stock right now.
Green Mountain facts
| Headquarters (Founded) |
Waterbury, Vt. (1981) |
| Market Cap |
$6.86 billion |
| Industry |
Packaged foods |
| Trailing-12-Month Revenue |
$2.65 billion |
| Management |
CEO Lawrence Blanford (since 2007)
CFO Frances Rathke (since 2003) |
| Return on Capital (Average, Past 3 Years) |
14.2% |
| Cash/Debt |
$13 million / $593 million |
| Competitors |
Kraft Foods (NYSE: KFT )
Sara Lee (NYSE: SLE )
Starbucks (Nasdaq: SBUX ) |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 36% of the 1,393 members who have rated Green Mountain believe the stock will underperform the S&P 500 going forward. These bears include fellow Fool Rich Duprey (TMFCop), who is ranked in the top 10% of our community, and bignort2001.
Just last month, Rich touched on tailwinds still working against Green Mountain: "Even though the stock has fallen precipitously ... [Green Mountain] has much further to fall as competitive pressures percolate to the top and its patent protections leave it tasting like day old joe."
In fact, Green Mountain still sports a lofty P/E of 34. That represents a premium to peers like Kraft (20), Sara Lee (13), and Starbucks (27).
CAPS member bignort2001 elaborates on the Green Mountain bear case:
The company is about to lose its [K-Cups patents], and is a specialty player in a market that doesn't have a large upside. Lots of people drink coffee, but very few can afford, or desire to, [own] the machine and all the cups required. Add in pressures from other companies making the cups and Green Mountain Coffee will continue to struggle.
What do you think about Green Mountain, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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