Keurig Green Mountain (GMCR) Is Today's Dead Cat Bounce Stock
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Keurig Green Mountain as such a stock due to the following factors:
- GMCR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $128.7 million.
- GMCR has traded 535,458 shares today.
- GMCR is up 3.1% today.
- GMCR was down 7.2% yesterday.
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More details on GMCR:
Keurig Green Mountain, Inc. produces and sells specialty coffee, coffeemakers, teas, and other beverages in the United States and Canada. The stock currently has a dividend yield of 2.1%. GMCR has a PE ratio of 15. Currently there are 2 analysts that rate Keurig Green Mountain a buy, 1 analyst rates it a sell, and 13 rate it a hold.
The average volume for Keurig Green Mountain has been 2.6 million shares per day over the past 30 days. Keurig Green Mountain has a market cap of $8.4 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.43 and a short float of 14.2% with 6.53 days to cover. Shares are down 61.6% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Keurig Green Mountain as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- GMCR's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has slightly increased to $242.14 million or 5.20% when compared to the same quarter last year. In addition, KEURIG GREEN MOUNTAIN INC has also modestly surpassed the industry average cash flow growth rate of 2.76%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food Products industry and the overall market on the basis of return on equity, KEURIG GREEN MOUNTAIN INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Food Products industry average. The net income has significantly decreased by 26.8% when compared to the same quarter one year ago, falling from $155.15 million to $113.62 million.
- Looking at the price performance of GMCR's shares over the past 12 months, there is not much good news to report: the stock is down 65.03%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GMCR is still more expensive than most of the other companies in its industry.
- You can view the full Keurig Green Mountain Ratings Report.
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