| Stock (Symbol) | Stock Price | |
Green Mountain Coffee (GMCR) |
$65 |
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| Data is as of | Expected to Report | Sector |
February 8, 2012 |
Apr 30 |
Food & Necessities |
| Sharek’s Take | ||
 Everything’s cranking at Green Mountain Coffee. First let’s start with sales of Keurig brewers and accessories, which jumped 76%. Next we need K-Cups to make coffee. Sales of K-Cups jumped 115% last quarter. Then add flavor: other products and royalties jumped 111%. Stir all that with higher profit margins and profits rose 233%. Also, debt gas slashed in half last year — from $1billion to just under $500 million. GMCR popped after reporting last quarter.The only negative is inventory rose 125% last quarter — but K-Cup sales increased 115% so I think this is fine. Short sellers have been picking on GMCR over inventory issues. That and high capital expenditures, which could be $700 million in fiscal year 2012. Sales are expected to be $4.3 billion in FY2012. Green Mountain silenced critics last quarter. Everything’s cranking. |
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| One-Year Chart | ||
 GMCR got smacked down in late 2011. I think the company might have pushed out a bunch of deals to deliver a HUGE quarter, then fell short of expectations the following quarter. Now all that’s behind us — everything’s cranking again. GMCR’s P/E of 24 is around what I think it should be, but this has gone into the 40s on numerous occasions. Profit growth is expected to be 33% and 47% the next two quarters, and the expected Long Term Growth Rate is a fluffy 31%. |
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| Earnings Table | ||
 Last quarter, profits zoomed ahead 233% while sales jumped 102%.GMCR whipped the 37 cent estimate by 23 cents. Note this estimate did not decline after GMCR missed the quarter earlier. Last quarter GMCR had sales of $1.16 billion vs the $1.06 billion estimate, so it beat sales estimates by $100 million. 2QtrsAgo GMCR got slammed by short sellers because sales were $712 million, short of the $761 million estimate by $49 million. Annual Profit Estimates only increased slightly. 2012 analyst estimates are similar to GMCR management estimates. I think analysts are affraid of adjusting from the herd. Quarterly estimates are still expected to climb very rapidly. These estimates did decline though, especially NextQtrEst, which is pretty much management’s own estimate. Once gain, analysts who follow GMCR are chicken. I say GMCR will probably beat, and is just trying to underpromise-overdeliver. |
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| Fair Value | ||
 GMCR is selling around the 25 times earnings I think the stock is worth. This stock could easily get a P/E of 35 though. |
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| Ten-Year Chart | ||
 The ten-year chart has a big spike in it. Shave that spike down and you see a steadily rising stock. Yearly EPS Growth is nearly identical to Yearly Stock Growth which tells me GMCR is right where it should be. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
8 of 20 |
Everything’s cranking at Green Mountain Coffee. I’m ignoring the short sellers and continue to like this operation. GMCR is fairly valued after the recent spike, but the stock has momentum to go higher. |
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Aggressive Growth Portfolio
8 of 10 |
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