Investing to Wealth

Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR)

Green Mountain Coffee Roasters Inc. (GMCR) is engaged in the specialty coffee industry. The Company sells more than 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 Inc. GMC sells whole bean and ground coffee, hot cocoa, teas and coffees in K-Cups mainly in domestic wholesale and retail markets, and directly to consumers. In addition, GMC sells Keurig single-cup brewers and other accessories primarily directly to consumers and to supermarkets. The majority of GMC’s revenue is derived from its North American wholesale markets.

Green Mountain Coffee Roasters Inc. was founded in 1981 and is headquartered in Waterbury, Vermont.

Source: Reuters.com, SEC Filings.

Financial Summary

Net sales for the fourth quarter of fiscal 2009 were up 65% to $222.2 million as compared to $134.8 million reported in the fourth quarter of fiscal 2008.

Net income for the fourth quarter of fiscal 2009 increased 103% to $14.4 million or $0.34 per diluted share, from $7.1 million or $0.18 per diluted share in the fourth quarter of fiscal 2008.

For the fiscal year ended September 26, 2009, the Company recorded net sales of $803.0 million, up 61% from $500.3 million for the year ended September 27, 2008. Net income for fiscal 2009 increased 151% to $55.9 million, or $1.39 per diluted share, as compared to net income of $22.3 million, or $0.58 per diluted share for the prior year. Excluding the impact of the $17.0 million or $0.26 per diluted share Kraft patent litigation settlement recorded in the first quarter of fiscal 2009, non-GAAP fully diluted EPS totaled $1.13 per share for fiscal 2009, up 95% from $0.58 per diluted share for fiscal 2008.

During fiscal 2009’s fourth quarter, 463 million K-Cup^® portion packs were shipped system-wide by all Keurig licensed roasters, up 70% over the year-ago quarter. For fiscal 2009, 1.6 billion K-Cup^® portion packs were shipped system-wide by all Keurig licensed roasters, up 63% over the prior year. Supporting continued growth in K-Cup demand, there were 713,000 Keurig brewers shipped during the fourth quarter of fiscal 2009 compared to 314,000 shipped during the fourth quarter of fiscal 2008, and 2,341,000 Keurig brewers shipped during fiscal 2009 compared to 983,000 shipped in fiscal 2008.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast amongst 8 polled investment analysts. Against the Green Mountain Coffee Roasters Inc company.

The 4 analysts offering 12-month price targets for GMCR have a median target of 86.00, with a high estimate of 102.00 and a low estimate of 72.00. The median estimate represents a 25.82% increase from the last price of 68.35.

Source: www.ft.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=GMCR.O

Investment Highlights

GMCR recently announced it has acquired Timothy’s Coffees of the World Inc. from an affiliate of Sun Capital Partners Inc. for a cash purchase price of approximately $157 million, in U.S. dollars, subject to adjustment. The acquisition includes the Timothy’s World Coffee^® brand and wholesale business (but does not include retail operations), and will be maintained as a wholly owned Canadian subsidiary, with operations integrated into GMCR’s Specialty Coffee Business Unit. GMCR anticipates the acquisition will be accretive to its earnings per share in fiscal year 2010.

Headquartered in Toronto, Ontario, Timothy’s is a premium coffee company that produces specialty coffee, tea and other beverages in a variety of packaged forms. Additionally, Timothy’s produces K-Cup^® portion packs for the Keurig^® Single-Cup Brewing System sold under the Timothy’s World Coffee^®, Emeril’s and Kahlua^® Original K-Cup brands. Timothy’s became a licensed roaster of Keurig Inc., a wholly owned subsidiary of GMCR, in 2000.

Corporate Responsibility Officer Magazine named Lawrence J. Blanford, president and CEO of GMCR, 2009 Responsible CEO of the Year in the Mid-Cap category. The Mid-Cap category includes medium-sized, public companies (sales between $100 million and $2 billion).

The CEO Awards recognize extraordinary accomplishments in corporate sustainability, governance, compliance, CSR and philanthropy. GMCR’s “whole system” approach to corporate social responsibility includes donating at least 5% of its pre-tax profits to social and environmental projects in local and coffee-growing communities; maintaining a robust employee volunteerism program; offsetting 100% of its direct greenhouse gas emissions and investing in Fair Trade Certified^TM coffee.

GMCR was ranked 11th on Fortune’s 2009 list of the 100 Fastest-Growing Companies. Earlier this year, Forbes.com named the Company one of the 100 Most Trustworthy Companies based on its transparent accounting practices and prudent management.

Source: http://www.gmcr.com/Investors/PressReleases.aspx

Technical Analysis

No current simple moving average signals.

GMCR is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

The MACD for GMCR currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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