Lone Pine Challenges Shorts with Green Mountain Coffee Stake

In a 13G filed with the SEC, Stephen Mandel's hedge fund Lone Pine Capital has disclosed a brand new position in Green Mountain Coffee Roasters (GMCR). The filing was made due to activity on August 19th, 2009 and Lone Pine now shows an 8.3% ownership stake in the company with 3,603,364 shares.

When we just recently examined Lone Pine's portfolio, it did not hold any shares of GMCR. This means that in the time elapsed between June 30th and August 19th, Lone Pine acquired its large position.

Green Mountain is an interesting story for two reasons. Firstly, there has been a large hedgie presence in this one for a while. And secondly, it is intriguing because of the high levels of short interest it has typically garnered. Those shorts were squeezed back in March/April of this year and we were all over that colossal move as we anticipated it and posted about it in real-time on our twitter page. It continued to reach new highs and pushed the bears out of the name.

Year to date for 2009, GMCR is up over 133% and had a 3:2 stock split back on June 9th. Yet, GMCR still clearly has its detractors. According to Yahoo Finance, 33.4% of GMCR's float is sold short (10.26 million shares) as of August 11th, 2009. This is up from the month prior when there were 9.91 million shares short. This is definitely an interesting battleground to watch as the growth-at-a-reasonable-price-(GARP) tolerant investors like Mandel take on the valuation naysayers who are heavily short. We'll continue to watch for any flesh wounds and will report from the battlefield.

Just Tuesday morning we also updated readers on the fact that Lone Pine has been selling shares of one of its U.K. holdings, Rightmove. And, in the recent past, we took a look at the rest of its positions in UK markets. In terms of other notable recent activity, Lone Pine has boosted its stake in Vistaprint (VPRT), as filed in a 13G earlier in August.

We track Stephen Mandel because he has returned 25% annually since inception back in 1997. Although he had a rough year in 2008, he is by far one of the best stockpickers in the game. He currently manages over $7 billion and you can read more about him in our post on Lone Pine's portfolio.

Taken from Google Finance:

Green Mountain Coffee Roasters Inc. is "engaged in the specialty coffee industry. The Company sells over 100 whole bean and ground coffee selections, hot cocoa, teas and coffees in K-Cup portion packs, Keurig single-cup brewers and other accessories. The Company manages its operations through two business segments, Green Mountain Coffee (GMC) and Keurig, Incorporated (Keurig)."

Comments

[C.S. Jefferson:]

A second go around on the same short squeeze play? Interesting. I won't participate in this chasing this play but you wonder what they know or, more importantly, what they may think they know?

Sep 03 03:02 AM

[Market Folly:]

Not sure if there will be a second squeeze but we thought it was prudent to highlight what happened last time. Short interest has always been high in this name. But then again, hedgie presence has been building in it too.

Sep 03 03:04 PM

[Cheeks:]

I was buying this last fall at 17.50 (SA).... these are the late-comers to the party and a contrarian indicator. Past performance for mandel was lucky - i'll bet against her anytime.

Sep 03 09:05 PM