Cramer vs. Greenberg: The Battle of Green Mountain

Editor's Note: Below is a discussion between Jim Cramer and Herb Greenberg on RealMoney's Columnist's Conversation early Thursday morning regarding issues related to investing in Green Mountain's (GMCR) stock.

GMCR
By Jim Cramer
Nov 21, 2013 6:46 AM EST

Good: when a company announces a big dividend, a huge buyback and better than expected earnings with good penetration and new products.

Bad: when a company slashes a dividend, or eliminates a buyback, misses earnings and has no innovation.

So Herb, do I have it backward? Is bad actually good and good actually bad?

Position: none

___________________________

Some Kool-Aid With that K-Cup, Jim?
By Herb Greenberg
Nov 21, 2013 7:25 AM EST

You're assuming there is a one-size fits all. When new divvy and big buyback are announced at a company where growth is slowing I'd say you've a company pulling out all stops to stem a shareholder revolt.

Take a look at growth: It's going the wrong direction. Margins? Sequentially (which counts in this situation) off a cliff -- and that's WITH the aid of lower coffee prices and a laundry list of one-time (or, let's say, not sustainably to-be-counted-on) items.

Guidance? Here's Stifel's Mark Astrachan, who rates the stock a sell: "The company lowered expectations for F2014 sales growth (now high single-digit growth, was low double-digit) and EPS growth (now 11%-14%, was high-end of mid-teens), and guided F1Q14 sales growth to be below consensus (low-to-mid single digit, consensus 7%-8%). We believe new guidance implies modest over-shipment relative to demand in F4Q13 and slowing K-Cup sales growth, largely a result of share gains for unlicensed brands and worsening price/mix." (You would think he was on a different call and covering a different company than the other analysts on the call.)

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