Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty coffee company Green Mountain Coffee Roasters (Nasdaq: GMCR) has received a distressing two-star ranking. While one-star stocks have been the worst performers, our data has shown that two-star stocks still lag the market by a significant margin and should be approached with caution; conversely, highly rated stocks have outperformed the S&P.
With that in mind, let's take a closer look at Green Mountain's business, and see what CAPS investors are saying about the stock right now.
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Green Mountain facts
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Headquarters (founded) |
Waterbury, Vermont (1981) |
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Market Cap |
$853.32 million |
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Industry |
Packaged Foods |
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TTM Revenue |
$500.28 million |
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Management |
Founder/Chairman Robert Stiller CEO Lawrence Blanford |
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Price-to-Earnings Ratio (GMCR and Industry) |
40 and 15 |
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Competitors |
Starbucks (Nasdaq: SBUX) Kraft Foods (NYSE: KFT) |
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CAPS members bearish on GMCR also bearish on |
General Motors (NYSE: GM) First Solar (Nasdaq: FSLR) |
|
CAPS members bullish on GMCR also bullish on |
Apple (Nasdaq: AAPL) Google (Nasdaq: GOOG) |
Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 35 of the 110 All-Star members who have rated Green Mountain -- some 32% -- believe the stock will underperform the S&P 500 going forward. Among the bearish population are Hugerat and golfooler.
Late last month, Hugerat pointed to a struggling rival as evidence to stay away: "This is a hyper-competitive industry, and consumers are extremely fickle. Witness the decline of Starbucks."
In a pitch from two weeks ago, golfooler shared that bearishness, tapping Green Mountain as a classic "good company, bad stock" situation:
A real high flier! There is lots of glitz to the story. The problem is, the p/e is huge and they seem to be planning on mojor groeth from the individual brew packets. Have you seen the price of the machines? What about the packets? Overpriced coffee will go the way of the cigar craze.
The scariest part of this is the shorts. At last check 53% of the float are shorts. That's frightening. The slighest miss on the big growth expectations and this will sink hard and fast.
Copyright © 2008 Universal Press Syndicate.
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