Perilous Reversal Watch: Green Mountain Coffee Roasters (GMCR)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Green Mountain Coffee Roasters ( GMCR) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Green Mountain Coffee Roasters 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 $682.4 million.
  • GMCR has traded 253,378 shares today.
  • GMCR is down 4% today.
  • GMCR was up 26.2% yesterday.

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More details on GMCR:

Green Mountain Coffee Roasters, Inc. is engaged in the specialty coffee and coffeemaker businesses in the United States and Canada. The company operates through two segments, Domestic and Canada. The stock currently has a dividend yield of 1.2%. GMCR has a PE ratio of 25.4. Currently there are 7 analysts that rate Green Mountain Coffee Roasters a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Green Mountain Coffee Roasters has been 3.3 million shares per day over the past 30 days. Green Mountain Coffee Roasters has a market cap of $11.9 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.16 and a short float of 30% with 5.39 days to cover. Shares are up 6.1% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Green Mountain Coffee Roasters as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.2%. Since the same quarter one year prior, revenues rose by 10.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GMCR's debt-to-equity ratio is very low at 0.10 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 1.24, which illustrates the ability to avoid short-term cash problems.
  • 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, GREEN MTN COFFEE ROASTERS's return on equity exceeds that of both the industry average and the S&P 500.
  • 41.51% is the gross profit margin for GREEN MTN COFFEE ROASTERS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.12% is above that of the industry average.
  • Net operating cash flow has significantly increased by 713.00% to $63.73 million when compared to the same quarter last year. In addition, GREEN MTN COFFEE ROASTERS has also vastly surpassed the industry average cash flow growth rate of 0.66%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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