Thursday, July 5, 2012

Green Mountain Coffee Roasters (GMCR) Stock Report

Anyone who knows anything about coffee knows something about Green Mountain. This company busted on the scene a few years ago with the purchase of Keurig their single cup coffee brewers.  The reason Green Mountain caught my eye was their immediately recognizable brand name and the volatility in their stock price.


Green Mountain Coffee Roasters (GMCR)
Recent price: $22.72
52 week range: 19.45 - 115.98
Market cap: 3.32B

Overview
The company's main focus is on specialty and organic Arabica rosted coffee through three different brands Tully's Coffee, Green Mountain Coffee and Newmans Own Organics Coffee. Their Keurig unit develops highly popular single cup brewing coffee makers that have a constant stream of revenue from the sale of their single cup coffee. They also offer specialty tea and hot cocoa.


Volitilty
Green Mount is not a penny stock but there are certain similarities I see with penny stock trading and that is the ability to realize a return from large percentage swings. Green Mountains stock price was at a high of 115.98 before falling to 19.45 and then settling at its current price of 21.40.


As you can see in this stock chart provided by Yahoo Finance there has been substantial volatility leaving room for a keen investor to take advantage of the risk for a sizable return.



 
 Green Mountain has had significant revenue growth from the chart above and below you can see their margins over the past few years.

 

Their net margin has shown improvements over the years as the company grows and operates more efficiently. I think the company will be able to achieve a better return to shareholders in the future by improving their margins. It is difficult to manage strong growth but as their growth slows and matures they will be able to operate more efficiently with higher returns to share holders.

Some of Green Mountain's current woes are from missed earning expectations and maturing growth. As well as law suits from shareholders with reports of misstated projections of revenue growth and demand for their Keurigs and coffee.

While this may be a short term and difficult challenge to overcome I see a lot of value in GMCR's price.

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2 comments:

  1. This post has several graphs which make easy to understand it. This will help us to find penny stocks and buy penny stocks.

    ReplyDelete