Why Are Green Mountain Shares Up?
Nov 1st 2012 9:51PM
Updated Nov 1st 2012 9:54PM
Green Mountain Coffee Roasters (NAS: GMCR) was mysteriously up big this morning and, in the following video, Fool.com analyst Blake Bos gives his thoughts on the company.
Unfortunately, there is yet another lawsuit alleging that Green Mountain used a fulfillment vendor to falsify sales orders. There is also the continuing story line about competition from Starbucks' similar new single-serve device, the Verismo. Yet, in spite of this negativity, shares were still trading significantly higher.
Blake suspects that the big pop in shares can be attributed to the company's huge short interest, which sits close to 40% of total shares outstanding. It's very easy for companies in this situation to go through some forced upside buying pressure as those short candidates seek to fulfill their orders at higher prices and push shares higher.
With Green Mountain as cheap as it's ever been, many investors are wondering whether this is the end of the former market darling, or the perfect entry point for an enormous rebound. You can find our recommendation for how to play the company in our new premium research report. In it you'll find everything you need to know about Green Mountain, including whether it's a buy at today's prices. Click here for instant access.
The article Why Are Green Mountain Shares Up? originally appeared on Fool.com.Andrew Tonner has no positions in the stocks mentioned above. Blake Bos has no positions in the stocks mentioned above. The Motley Fool owns shares of Starbucks and has the following options: long DEC 2012 $16.00 puts on Green Mountain Coffee Roasters, short DEC 2012 $21.00 calls on Green Mountain Coffee Roasters, and short JAN 2013 $47.00 puts on Starbucks. Motley Fool newsletter services recommend Green Mountain Coffee Roasters and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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