Shares of Keurig Green Mountain (GMCR.DL) jumped big today after Coca-Cola announced it would increase its stake in the at-home coffee brewer. Back in February, the beverage giant had agreed to a deal that gave it a 10% stake in Keurig, with the opportunity to increase that amount to 16%. Today, Coke announced that it would take that deal.
In today's "Stock of the Day," Motley Fool analyst Jason Moser says this is a great announcement for Keurig since it's coming at a pivotal time for the company. Once upon a time, Keurig was just a coffee machine, but it's created a lot of new relationships recently with companies like Coke and Campbell Soup that have validated its business. On top of that, Coke's stake in Keurig indicates that it has a lot of faith in the future of the at-home beverage market, a niche market that Keurig is poised to take a large chunk of.
So, should investors consider buying today after Keurig's jump? Jason doesn't like the idea of buying after a 10% pop, but he does love the company's many deals and its razor-and-blade business model. At the end of the day, he thinks it's an impressive company with a lot of potential and it should stay at the top of an investor's watchlist.
