Green Mountain Coffee Roasters
Even at half-price, Green Mountain’s stock will give you the jitters.
- (opens in new tab)
- (opens in new tab)
- (opens in new tab)
- Newsletter sign up Newsletter
For years, investors seemed as addicted to Green Mountain Coffee Roasters (symbol GMCR (opens in new tab)) as customers were to its joe. From a split-adjusted low of $2.80 in 2006, the stock soared to $116 before peaking last summer. But the price has been sliced in half since hedge-fund manager David Einhorn slammed Green Mountain. His reservations: Growth opportunities are limited; the expiration of patents will eat into its lucrative K-Cup business; and the firm’s financial results are sketchy. But have investors overreacted, and is the stock now a buy?
Green Mountain sells single-cup coffee makers and K-Cup coffee packets, as well as roasted coffee. Profits took off after the firm bought Keurig, a maker of single-cup brewers, in 2006. Green Mountain, which earned $8.4 million, or 7 cents per share, in the fiscal year that ended September 2006, made $249 million, or $1.31 per share, in the year that ended last September, with K-Cups accounting for 70% of profits.
But the firm’s K-Cup patents expire next September. That could let rivals push down prices and steal sales. Longbow Research analyst Alton Stump, who rates the stock a “buy,” says patent problems won’t pressure profits until 2013.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Bears say the company manages inventory and expenses poorly and has engaged in fraudulent accounting. That’s hard to prove, but the feds have been investigating Green Mountain’s financial reporting for a year.
Bulls argue that K-Cup sales are picking up now that Green Mountain sells them in groceries, Walmart and Starbucks. But with more competition coming and an accounting cloud hanging over the company, investors expecting more double-espresso jolts of profits are likely to be disappointed and should avoid the stock.
-
-
Top Money Market Accounts 2023
Money market accounts are interest-bearing accounts at a bank or credit union, typically paying high interest rates. Here are the best right now.
By Erin Bendig • Published
-
Stock Market Today: Stocks Brush Off Deutsche Bank Troubles
Troubling financial sector headlines kept stocks lower for most of the day, but the major indexes pushed higher by the close.
By Karee Venema • Published
-
Stock Market Holidays in 2023: NYSE, NASDAQ and Wall Street Holidays
Markets When are the stock market holidays? Take a look at which days the NYSE, Nasdaq and bond markets are off in 2023.
By Kyle Woodley • Last updated
-
Stock Market Trading Hours: What Time Is the Stock Market Open Today?
Markets When does the market open? While it's true the stock market does have regular hours, trading doesn't stop when the major exchanges close.
By Michael DeSenne • Published
-
Bogleheads Stay the Course
Bears and market volatility don’t scare these die-hard Vanguard investors.
By Kim Clark • Published
-
I-Bond Rate Is 6.89% for Next Six Months
Investing for Income If you missed out on the opportunity to buy I-bonds at their recent high, don’t despair. The new rate is still good, and even has a little sweetener built in.
By David Muhlbaum • Last updated
-
What Are I-Bonds?
savings bonds Inflation has made Series I savings bonds enormously popular with risk-averse investors. How do they work?
By Lisa Gerstner • Last updated
-
This New Sustainable ETF’s Pitch? Give Back Profits.
investing Newday’s ETF partners with UNICEF and other groups.
By Ellen Kennedy • Published
-
As the Market Falls, New Retirees Need a Plan
retirement If you’re in the early stages of your retirement, you’re likely in a rough spot watching your portfolio shrink. We have some strategies to make the best of things.
By David Rodeck • Published
-
Where the Midterm Election Races Stand Today
Economic Forecasts In a tight race, these state elections may make the difference when midterm results are announced in November.
By Sean Lengell • Published