Green Mountain Coffee Roasters Goes Down Big

Seth Golden profile picture
Seth Golden

At Capital Ladder Advisory Group, we have offered extensive coverage of Green Mountain Coffee Roasters (NASDAQ:GMCR) via production and manufacturing line analysis, shipping documents and channel checks over the last 12-month period. Most recently, I wrote about what investors could anticipate from the single-serve coffee company in the future and unfortunately, some of those insights have recently played out in the marketplace. I recently posed the following question to GMCR investors: "What investors really want to know is will there be another 'shoe to drop,' or will they be rewarded for sticking with such volatility over the last several quarters?" It seems as though this question has been answered through the launch of greater competition in the market place, which we'll discuss in more detail later in this article.

Shares of GMCR soared recently on the heels of new analyst coverage by Lazard's Matthew DiFrisco. Mr. DiFrisco began coverage of GMCR with a buy rating and a target price of $39 a share. Shares headed higher on this offering by Lazard and breached the $30 level for the first time since May, affording investors some hope that shares of GMCR would once again return to glory, or at the very least, achieve a more reasonable price to earnings multiple. So did the Lazard analyst do his homework? The current price action in shares of GMCR would suggest that he didn't, but the reality is that stocks can and do move based on more than just the fundamentals or real time data analysis.

A few days after this newly announced analyst coverage, Luigi Lavazza disclosed that it had increased its holdings in GMCR by roughly 36%, adding 2.8 million shares. With this increase, Lavazza now owns a 6.8% stake in GMCR. Shares of GMCR continued their march higher on this latest news headline and surpassed the $32

This article was written by

Seth Golden profile picture
Formerly Chief Market Strategist at Capital Ladders Advisory Group LLC. After the sale of certain of CLAG's retail and institutional assets in October 2015, I have commenced my latest venture in the CPG industry which is centered on the development and licensing of consumer and commercial technology. CooLinX Integrated Technologies develops technologies for the beverage and CPG industry. We are presently effecting licensing agreements with multi-national brands and co-developing products aimed for mass market consumption.

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