August 2, 2012 -- Green Mountain Coffee Roasters Risk/Yield for 2012
Green Mountain Coffee Roasters recently had it's earnings report and while there are still issues, it might almost be cheap at this point since growth is still expected to be between 15 to 20% and P/E is at approximately 8 (see article).
Looking at the GMCR IPO 2012 Risk/Yield graph, it depicts that the period most associated with Risk was between April to June of 2012 and after that, the Risk slowly decreases through the end of the year. The yield, decreasing from the May period and thru June and July starts to increase in August of 2012.
The GMCR IPO 2012 Delta Core/Transient illustrates the shifts between the risk and yield more clearly. The April to May 2012 period is marked by a shift for the delta core from the yield side of the graph to the risk side of the graph. The delta core stays in the risk area until the August period at which time it moves into yield. Note that the movements are +/- 2 weeks as the readings are done for the 1st and 15th of each month.
The delta core does peak at about 200 in September of 2012 and notably, while there are risk factors at that time, they are not overwhelming. There is a risk momentum of the delta transient during the August/September timeframe possibly indicating some bad press or issues arising that take attention from the "better picture".
This might just be a company that the public wants to "hate" at least for a while longer. Whatever gains it's going to get will likely be hard to come by. As the economy gets better in the fall period this stock will likely also rise but, if the fiscal cliff at the end of the year comes to pass, then this stock might not be perceived as more stable than others in the same class.
Disclosure as of 8/2/2012 - Green Mountain Coffee Roasters (GMCR) is not part of our portfolio at this time.
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