1-Star Stocks Poised to Plunge: Green Mountain?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty coffee company Green Mountain Coffee Roasters (NAS: GMCR) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Green Mountain's business and see what CAPS investors are saying about the stock right now.
Green Mountainfacts
Headquarters (founded) | Waterbury, Vt. (1981) |
Market Cap | $6.8 billion |
Industry | Packaged foods |
Trailing-12-Month Revenue | $3.2 billion |
Management | CEO Lawrence Blanford (since 2007) |
Return on Equity (average, past 3 years) | 14.2% |
Cash/Debt | $84.2 million / $488.4 million |
Competitors | Farmer Brothers |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 35% of the 1,473 members who have rated Green Mountain believe the stock will underperform the S&P 500 going forward.
Just last month, one of those Fools, hiddenflem, offered several reasons to stay on the sidelines:
(1) There are now very good alternatives out there to [K-Cups] including Fog Chaser and other great [K-Cup] like pods that fit in the machine that are much cheaper ... (2) fill it yourself cups are clearly thriving in sales at [Amazon], it's no longer a secret that you can pack your own (3) patent expiry later this fall ... less certain of how this will affect sales but there are rumors out there swirling about big rivals coming into the business. Will [Green Mountain] be successful in getting current consumers to pay up for fancier machines, pay an even greater premium for more sophisticated pods or will people consider current options to be "good enough"? I think the latter.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Green Mountain and Starbucks, as well as writing covered calls on Starbucks. Motley Fool newsletter services have recommended creating a lurking gator position in Green Mountain. The Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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