Starbucks (NASDAQ: SBUX) and Green Mountain Coffee Roasters (NASDAQ:GMCR) just can't keep their hands off each other. Yesterday, Starbucks and the specialty coffee company announced they would expand a partnership to make and sell Starbucks and Tazo-branded single serve packs for use in Green Mountain's popular Keurig brewing system. The new agreement is for a minimum of five years.
Green Mountain's stock climbed more than 13% on the news in after-hours trading. And why shouldn't it? Having Starbucks' support should help Green Mountain as it establishes a foothold in international markets, where the single-serve category is just starting to catch on.
Shares of Green Mountain have rebounded spectacularly since March of last year, when Starbucks released its Verismo single-cup coffee system. At the time, analysts, including myself, worried that Starbucks' new single-serve machine would compete with the Keurig brewer.
Today, however, the ongoing partnership of the two companies is giving investors renewed hope that Green Mountain stock can climb back to the top. And the stock seems to be doing just that -- shares of Green Mountain have gained more than 48% so far this year. Who knows ... maybe Starbucks is setting the scene for a very green acquisition.
Does the stock have more room to run?
Fool contributor Tamara Rutter owns shares of Starbucks. The Motley Fool recommends Green Mountain Coffee Roasters and Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.