Earnings Give GMCR Stock Much-Needed Jolt

It has been a miserable year for Green Mountain Coffee Roasters (Nasdaq: GMCR).

On this date in 2011, GMCR stock was trading at $106.57 per share – not far off an all-time high. Yesterday, the stock closed at a mere $17.51 a share.

Once one of the darlings of the stock market, GMCR stock has become toxic. The company holds just a quarter of the market value that it did a year ago. With a market cap of just over $3 billion, the Vermont-based specialty coffee company is suddenly almost qualifies as a small cap stock.

Perhaps its latest earnings report will signal a turnaround.

The company’s fiscal third-quarter profit improved 30% from a year ago, it announced after the market closed yesterday. GMCR also vowed to repurchase $500 million of its own shares over the next two years.

While the earnings fell short of analyst expectations, the improvement and share buyback pledge was more than enough to inject life into the beaten down stock.

GMCR stock is up 27% this morning, rising to $22.74 per share. That doesn’t sound like much compared to where it was a year ago. But it’s the highest the shares have been in close to a month.

Green Mountain’s fall from grace began last fall when famed hedge funder David Einhorn very publicly called the company’s accounting practices and future earnings potential into question. Among other things, Einhorn predicted that sales of GMCR’s signature single-serve K-Cups and Keurig brewers would dry up.

The stock promptly fell 56.5% in less than a month. When revenues declined earlier this year, GMCR stock fell even further into the abyss.

But today, at least, shares of the once-proud coffee company are getting a nice bounce-back.

Published by Wyatt Investment Research at