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 specialty coffee company Green Mountain Coffee Roasters
So what: Green Mountain's second-quarter profit jumped a solid 42%, but a highly disappointing full-year outlook is reigniting serious concerns over its growth prospects going forward. Expiring patents and looming high-end brewer competition from Starbucks
Now what: Management now sees 2012 adjusted EPS of $2.40-$2.50 on sales of $3.8 billion-$4.0 billion, well below Wall Street's view of $2.65 and $4.27 billion, respectively. "As we continue to move forward on the adoption curve, we believe we may experience a more moderated growth trajectory for both Keurig brewer and K-Cup pack sales and our revised 2012 estimates reflect as much," said President and CEO Larry Blanford. "However, given the sheer volume of brewers sold, we continue to expect a significant growth in the installed brewer base." So while Green Mountain's fastest growth days might be behind it, Mr. Market might finally be offering its still-respectable future prospects at a discounted price.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of and creating a lurking gator position in Green Mountain, as well as buying shares of and writing covered calls on Starbucks. Try any of our Foolish newsletter services free for 30 days.