Was Bob Stiller's Investment in Noble Roman's a Smart Move?

Includes: GMCR, NROM
by: Michael Goode

Sometimes a large investor makes their presence known and it becomes fairly obvious who is causing a stock to move. This is particularly true in microcaps. So when the price of Noble Roman’s (OTCQB:NROM) stock jumped up 46% a week ago, it was not too hard to figure out that it was largely because of one large individual investor buying a chunk (although my initial guess was completely wrong). How do I know this? The person just filed a form 13G with the SEC, indicating that he now owns 10% of Noble Roman’s.

That buyer was none other than Robert P. Stiller, chairman of the board of Green Mountain Coffee (NASDAQ:GMCR) [$37.44 0.00%, market cap: $881.3M] (and for those old hippies out there, founder of E-Z Wider). Bob has owned the stock of Noble Roman’s since early in the spring of 2007. (See his 13G filing on March 6, 2007, where he stated that he owns 1,000,000 shares.) He increased that Earlier this month he increased that to just under 2,000,000 shares. Green Mountain has a $900 million market cap. So what does Bob want with a $40 million pizza company, and should anybody follow his example? That is the $4 million dollar question (at least for Bob).

So far, Bob has not done well on his Noble Roman’s investment. His average price on the earlier purchases in February and March 2007 was probably around $4.15. At a recent stock price of $2.40, he has lost 43% of his initial investment.

Microcaps will often see random individuals that buy large stakes. Sometimes the large investors are right, and other times they are not. In this case, as with many others, only time will tell.

Disclosure: I am short NROM.OB.