Starbucks Roasted by Green Mountain

As the economy recedes, Americans are cutting back on $5 lattes but still need to satisfy their caffeine addictions. As a result, Green Mountain Coffee Roasters(GMCR Quote) stands to benefit from a trade-down effect as consumers seek cheaper, but flavorful, coffee. The loser? Starbucks(SBUX Quote).

TheStreet.com Ratings expects "buy"-rated Green Mountain to extend its strong performance this year and outperform "hold"-rated Starbucks, in addition to food-products competitors including "sell"-rated Smithfield Foods(SFD Quote), as well as Sanderson Farms(SAFM Quote), Hain Celestial(HAIN Quote) and Del Monte Foods(DLM Quote), all of which are rated "hold."

Green Mountain's fiscal first-quarter results trounced estimates. Revenue jumped 55.8% to $197 million, and net income rose five-fold to $14.38 million. The Waterbury, Vermont-based company has posted year-over-year earnings per share growth for eight consecutive quarters, but the latest increase, from 12 cents per share to 56 cents per share, indicates a dramatic surge in profit. Starbucks, in contrast, reported that revenue in the three months through December fell six percent to $2.6 billion, and net income plunged 69% to $64.3 million. ...