Green Mountain Shares Surged: What You Need to Know

Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of single-cup coffee king Green Mountain Coffee Roasters (NAS: GMCR) heated back up again today, gaining as much as 10% in intraday trading.

So what: The gain today is probably small consolation for those who have been holding Green Mountain shares over the past week. The company's earnings report yesterday stoked the fire that's been building under the stock as prominent investors -- including David Einhorn -- have become very vocal short-sellers. That led to a massive sell-off during yesterday's trading session. Today we're probably seeing some simply bounce-back action in the wake of the selling, along with some excitement from a positive Cannacord Genuity report defending the company.

Now what: I wouldn't put too much weight on today's action. That is, there's not much fundamental in it -- it's a trading rebound plus the opinion of an analyst. For investors wondering whether to get in -- or stay in -- the focus should still be on the underlying business and what that is worth.

Though this Fool hasn't been a fan of Green Mountain's stock -- largely because of a historically high valuation -- for investors reeling from the stock's performance over the past week, it's worth keeping in mind that truly Foolish investors don't judge an investment based on a week. Even after the disastrous fall yesterday, Green Mountain's shares still trade 34% higher than they did at this point last year.

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At the time thisarticle was published Motley Fool newsletter services have recommended buying shares of and creating a lurking gator position in Green Mountain Coffee Roasters. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas nofinancial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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