Posts Tagged ‘material errors’

Green Mountain Coffee Roasters: Calling a Bean, a Bean

To Err is Human, To Disclose Divine.

Courtesy of Sam E. Antar with Ilene

Green Mountain Coffee Roasters (NASDAQ: GMCR) is currently under the scrutiny of the Securities and Exchange Commission (SEC) and is facing numerous class action lawsuits alleging securities fraud. In particular, plaintiffs are alleging false and misleading disclosures in violation of federal securities laws.

One troubling issue is that when Green Mountain initially disclosed an accounting error concerning its K-Cup margin percentages, it claimed that the error was “immaterial.” Material and immaterial errors are treated differently.  If an accounting error is immaterial, a public company is required to correct it by making a one-time cumulative adjustment to earnings in the latest quarter. If an accounting error is material, a public company is required to notify investors that its previous financial reports cannot be relied on and that it will restate its affected financial reports to correct that error.

Background

On Monday, September 20, 2010, the SEC notified Green Mountain Coffee Roasters that it was conducting an informal inquiry. It requested information concerning “revenue recognition practices and the Company’s relationship with one of its fulfillment vendors.” Eight days later, on September 28, 2010, Green Mountain surprised investors by disclosing news of the SEC inquiry in an 8-K filing. In that 8-K report, Green Mountain also disclosed that it discovered an "immaterial accounting error" affecting financial reports issued from 2007 to June 26, 2010:

In connection with the preparation of its financial results for its fourth fiscal quarter, the Company’s management discovered an immaterial accounting error relating to the margin percentage it had been using to eliminate the inter-company markup in its K-Cup inventory balance residing at its Keurig business unit. Management discovered that the gross margin percentage used to eliminate the inter-company markup resulted in a lower margin applied to the Keurig ending inventory balance effectively overstating consolidated inventory and understating cost of sales. Management determined that the accounting error arose during fiscal 2007 and analyzed the quantitative impact from that point forward to June 26, 2010.

As of June 26, 2010, there is a cumulative $7.6 million overstatement of pre-tax income. Net of tax, the cumulative error resulted in a $4.4 million overstatement of net income or a $0.03 cumulative impact on earnings


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ValueWalk

Russia Opens 'Military Olympics' With Aviation Competition

By Brendan Byrne. Originally published at ValueWalk.

The competition has been christened Aviadarts-2015, and forms part of the larger Army Games taking place in Russia.

Aircraft and pilots from four countries will be put through their paces, shooting at specially constructed targets with live ammunition. Aviadarts-2015 started on Monday in Russia's central Ryazan region, and features participants from Russia, Belarus, Kazakhstan and China, according to RT.

Various aircraft to compete in Russian skies

Until August 15, the skies over Ryazan will be filled by fighter, bomber, ground attack, transport and long-range aircraft showing off their aerial skills. It is thought that Su-30 and Su-25 fighter jets will be on display, along with Mi-28 helicopters and Il-76 planes, all of which wi...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The bull market is coming to an end (Business Insider)

No one knows to what still crazier level this stock market is headed, or what kind of decline – if any ever, the bulls say – it will experience. But we all have our signs and signals that we keep our eyes on, hoping to get the drift in time.

No one wants to go through another crash like the last three (1987, 2000, and 2008 which all occurred during my investing years) with any significant amount money tied up in stocks (not to speak of bonds).

Post-Coup Thailand Sees Economic Slump Putting Press...



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Phil's Favorites

Peter Van Buren, Washington and Tehran Come in From the Cold

 

Tomgram: Peter Van Buren, Washington and Tehran Come in From the Cold

Intro by Tom at TomDispatch

Every election needs an organizing catchphrase and that goes doubly for the Republican presidential race, with 16 candidates having entered the fray and more on the way. I think I have the perfect one for the moment: “You’ve been Trumped!” After all, one striking thing about the Republicans, now that they’ve morphed into the party of war, is that any new candidate is obl...



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Zero Hedge

Affirmatively Destroying America's Neighborhoods In The War On Suburbia

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Bob Livingston via PersonalLiberty.com,

Few of us understand patient gradualism. We live and have our being within a few years and mostly in an unconscious automated state of mind.

But people in power are long-term planners. They absolutely understand human nature and how to channel it to the evolution and refinement of the authoritarian state.

Authoritarianism is based on long-term planning. Authoritarianism is a philosophy of collectivism. Some call it democracy. Some call it communism. Some call it ...



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Chart School

Second Day of Gains

Courtesy of Declan.

Another round of buying swept through Large Cap indices, but other indices didn't enjoy the same level of interest.

The S&P had the best of it. Since the middle of July it has enjoyed a strong advance relative to Small Caps and Technology indices, but it may be time for it to revert to mean. Technicals are a little scrappy, but are holding to the bearish side, but one more day of gains could swing it back in bulls favour.


The Nasdaq banked a small gain, but it's up against the big red candlestick from last week. The 'bull trap' is still in play. Technicals are mixed here too.

...

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Insider Scoop

Williams-Sonoma Upgraded To Overweight At JP Morgan, Firm Thinks 26% Upside Is Possible

Courtesy of Benzinga.

Related WSM Oppenheimer Upgrades Williams-Sonoma, Says Housing Backdrop Still Improving Credit Suisse Discusses Home Furnishings Stocks, Notes Low Expectations And Negative Investor Sentiments

In a report published Wednesday, JP Morgan analyst Tami Zakaria upgraded the rating on Williams-Sonoma, Inc. (NYSE: WSM) from Neutral to Overweight, while raising the price target from $81 to $103...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Travel indicator being put to critical tests

Courtesy of Chris Kimble.

The American Economy is driven a good deal by the consumer.

The table below reflects that nearly 70% of GDP is based consumption.

CLICK ON CHART TO ENLARGE

The 4-pack below looks at consumption with a focus on the travel and leisure sector, by looking at Avis (CAR), Hertz (HTZ), Expedia (EXPE) and Priceline (PCLN).

CLICK ON CHART ABOVE TO ENLARGE

While many seem to be occupied by the news abou...



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Sabrient

Sector Detector: Lackluster earnings reports put eager bulls back into waiting mode

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Corporate earnings reports have been mixed at best, interspersed with the occasional spectacular report -- primarily from mega-caps like Google (GOOGL), Facebook (FB), or Amazon (AMZN). Some of the bul...



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OpTrader

Swing trading portfolio

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

Gold Spikes Back Above $1100, Bitcoin Jumps

Courtesy of ZeroHedge. View original post here.

Gold is jumping after the overnight double flash-crash...testing back towards $1100...

Bitcoin is back up to pre-"Greece is Fixed" levels...

Charts: Bloomberg and Bitcoinwisdom

...

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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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