Green Mountain Coffee Roasters (
was going nowhere, sentenced to investment purgatory by hedge
funder David Einhorn - the Grim Reaper of the stock market?
That was five months ago. Today, GMCR shares are pricier than
they've been in over a year.
Shares of the Vermont-based specialty coffee company rose
another 2% on Thursday to close above $58 a share for the first
time since March 8, 2012. That's more than triple where it was in
early August, when the once-fast-rising stock bottomed out at
Greenlight Capital hedge fund manager
David Einhorn famously skewered GMCR
in an hour-long PowerPoint presentation at the Value Investing
Congress in October 2011. He questioned the company's accounting
practices, highlighted an SEC inquiry into those practices, and
warned about the upcoming patent expirations on the company's
The stock flatlined for the next nine months, dropping from
roughly $93 in early October to $17 last July.
Now it's back. The company weathered its K-Cup patent
expirations last September, and remains the dominant player in
the single-serve field. GMCR increased its earnings each of the
last two quarters. Rather than take a step back with the added
competition, the company is expected to grow its earnings 18%
this year and another 14% in 2014.
With a forward PE of 18, the stock remains fairly reasonably
priced given its growth outlook. Its run may not be over.
At the very least, the worst appears to be over for Green
Mountain Coffee Roasters. The stock seems here to stay.