Does the New Deal With Coca-Cola Make Keurig a Buy Today?
Shares of Keurig Green Mountain jumped big today after Coca-Cola announced it would increase its stake in the at-home coffee brewer. Back in February, the beverage giant had agreed to a deal that gave it a 10% stake in Keurig, with the opportunity to increase that amount to 16%. Today, Coke announced that it would take that deal.
In today's "Stock of the Day," Motley Fool analyst Jason Moser says this is a great announcement for Keurig since it's coming at a pivotal time for the company. Once upon a time, Keurig was just a coffee machine, but it's created a lot of new relationships recently with companies like Coke and Campbell Soup that have validated its business. On top of that, Coke's stake in Keurig indicates that it has a lot of faith in the future of the at-home beverage market, a niche market that Keurig is poised to take a large chunk of.
So, should investors consider buying today after Keurig's jump? Jason doesn't like the idea of buying after a 10% pop, but he does love the company's many deals and its razor-and-blade business model. At the end of the day, he thinks it's an impressive company with a lot of potential and it should stay at the top of an investor's watchlist.
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The article Does the New Deal With Coca-Cola Make Keurig a Buy Today? originally appeared on Fool.com.Jason Moser and Mark Reeth have no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and Keurig Green Mountain and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. 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 Motley Fool has a disclosure policy.
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