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What: Shares of Green Mountain Coffee Roasters
So what: Sales of Green Mountain's Keurig brewer have certainly been smoking, but the deal allows the company to attract even more new users with popular premium brands and better access through Starbucks' thousands of retail locations. For Starbucks, whose shares are also up nicely on the news, the partnership represents its latest push into the fast-growing $2 billion U.S. single-cup coffee market.
Now what: This single cup-pact is certainly good news for Green Mountain, but I'd stay on the sidelines at this point. Without any more details regarding the exact length and terms of the partnership, it's tough to tell whether today's staggering rally is justified. After all, with a stock that's blasting through its 52-week highs and a P/E sitting north of 110, the margin for error on Green Mountain seems particularly small.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Green Mountain is a Motley Fool Rule Breakers pick, and Motley Fool Options has recommended buying puts on it. Motley Fool Alpha has opened a short position on Green Mountain. Starbucks is a selection of Stock Advisor, and the Fool owns shares of it. Try any of our Foolish newsletter services free for 30 days.
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