One of the great maxims of traders and Wall Street pros is to follow the "smart money."

I'm not much for the thesis that institutional shoppers tend to make smarter investing decisions, but many of you who've read my ruminations on insider buying say you'd also like to know how the Big Money is betting. Your wish is my command.

Next up: Green Mountain Coffee Roasters (Nasdaq: GMCR). Are institutions bullish or bearish when it comes to the coffee company?

Foolish facts

Metric

Green Mountain Coffee Roasters

Motley Fool CAPS stars (out of 5) *
Total ratings 1,021
Percent bulls 68.4%
Percent bears 31.6%
Bullish pitches 124 out of 193
Highest-rated peers Seneca Foods, John B. Sanfillippo & Son, J&J Snack Foods

Data current as of Nov. 27.

Among the pantheon of overvalued stocks that exist on our Rule Breakers scorecard, none elicits as much frustration as Green Mountain Coffee Roasters. Fools don't believe the caffeine high can last much longer.

"Over the past 12 months, this company has cash flow from operations of approximately $40 million. The market cap is currently approximately $4.3 billion, or roughly 110 times cash flow from operations. This is completely illogical for a company in a low-tech business like roasting coffee beans. At some point, [Green Mountain Coffee] is going to crash big time," CAPS All-Star investor Entrepreneur58 wrote earlier this month.

Fair enough. All growth must come to an end at some point. Trouble is, all forecasts for the end for Green Mountain were wrong. Both revenue and profit growth are accelerating and returns on capital are rising.

Institutional ownership history

Top Owners

2007*

2008*

2009*

Latest*

Wellington Management Company

59,364

13,500

4,080,960

16,180,420
Fidelity Investments

15,299,901

14,155,591

10,264,293

11,008,993
William Blair Investment Management

-

4,835,137

5,360,976

5,635,773
BlackRock

235,350

3,147,921

5,058,723

5,296,684
Lone Pine Capital

-

-

 11,409,861

5,227,990
TOP 25 TOTAL

29,586,004

49,653,973

53,945,343

85,817,042

Source: Capital IQ, a division of Standard & Poor's.
*Indicates the number of shares owned.

Institutional investors love this sort of performance, especially the short-termers. Their momentum-driven trading style requires betting on stocks that are routinely hitting higher highs. With few exceptions, Green Mountain has been that sort of stock.

And yet some institutions are as nervous about Green Mountain as Entrepreneur58. Lone Pine Capital has cut its stake by more than 50% since last December. Tremblant Capital, another top-25 institutional owner, has sold off 48% of its holdings over the same period.

Competitor and peer checkup

Company

Institutional Ownership

Insider Ownership

Green Mountain Coffee Roasters 81.26% 11.98%
Jarden (NYSE: JAH) 94.45% 5.62%
Kraft Foods (NYSE: KFT) 76.13% 0.11%
Peet's Coffee & Tea (Nasdaq: PEET) 103.88% 1.84%
Starbucks (Nasdaq: SBUX) 75.92% 2.71%

Source: Capital IQ. Data current as of Nov. 27.

But these two are in the minority, as are most Fools. And looking at Green Mountain's ownership profile compared with its peers, I'm not sure the bulls have it wrong. Founder Robert Stiller owns nearly 11% of the business he started.

Institutions, meanwhile, own 81% of the business. That's roughly in line with its closest peer, Starbucks, but leaves room for Big Money investors to buy more if they continue to believe in Green Mountain's growth story. I still do; I'm sitting on a 13-bagger in CAPS and see no reason to sell.

Now it's your turn to weigh in. Do you think the institutions are wrong about Green Mountain Coffee Roasters? Let us know what you think using the comments box below. You can also recommend other stocks for me to evaluate by sending me an email, or replying to me on Twitter.

Interested in more info on Green Mountain Coffee Roasters? Add it to your watchlist by clicking here.