DARK HORSE HEDGE – One More Cup of Coffee Before You Go, GMCR
by ilene - October 20th, 2010 10:06 pm
DARK HORSE HEDGE – One More Cup of Coffee Before You Go, GMCR
By Scott Brown at Sabrient, and Ilene at Phil’s Stock World
Your sister sees the future
Like your momma and yourself
You’ve never learned to read or write
There’s no books upon your shelfAnd your pleasure knows no limits
Your voice is like a meadowlark
But your heart is like an ocean
Mysterious and darkOne more cup of coffee for the road
One more cup of coffee ‘fore I go
To the valley below – Bob Dylan
Green Mountain Coffee Roasters (GMCR) doesn’t at first glance seem like the type of company that would need to be “mysterious and dark” but when “pleasure knows no limits” it can down into a metaphorical valley. How does GMCR, engaged in the specialty coffee and coffee maker businesses, churning out quarterly profits that meet analyst expectations while growing at 61% per year over the past five years, and expected to grow another 35% over the next five years, end up at #18 on the Sabrient VCU short ranking?
The fact that Michelle Stacy, President of Keurig (patented single cup brewing technology for GMCR), exercised 30,000 options at $6.20 on August 13, 2010 and simultaneously sold the shares on the open market at $30.95 for gross proceeds of $928,500, again exercised 5,000 options at $6.20 on September 13, 2010 and simultaneously sold the shares on the open market at $35.40 for gross proceeds of $177,000 and a week later exercised another 5,000 shares from $6.20-$9.14 and simultaneously sold the shares on the open market at $37 for gross proceeds of $185,000 alone isn’t enough to raise any eyebrows or red flags.
There are many reasons that insiders may sell shares which have nothing to do with their perception of the company’s prospects or valuation. However, when a week after the last insider sale the company discloses that the SEC is inquiring into the company’s methods for accounting for revenues, it starts to look a bit more dark and mysterious. It is worth noting that Keurig accounted for over half of GMCR revenue last year, so when the President of Keurig is selling, it is worth a further look. When the SEC discloses an inquiry into the companies accounting it is…
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DARK HORSE HEDGE – One More Cup of Coffee Before You Go, GMCR
by Sabrient - October 20th, 2010 9:59 pm
Reminder: Sabrient is available to chat with Members, comments are found below each post.
DARK HORSE HEDGE – One More Cup of Coffee Before You Go, GMCR
By Scott Brown at Sabrient, and Ilene at Phil’s Stock World
Your sister sees the future
Like your momma and yourself
You’ve never learned to read or write
There’s no books upon your shelfAnd your pleasure knows no limits
Your voice is like a meadowlark
But your heart is like an ocean
Mysterious and darkOne more cup of coffee for the road
One more cup of coffee ‘fore I go
To the valley below – Bob Dylan
Green Mountain Coffee Roasters (GMCR) doesn’t at first glance seem like the type of company that would need to be “mysterious and dark” but when “pleasure knows no limits” it can down into a metaphorical valley. How does GMCR, engaged in the specialty coffee and coffee maker businesses, churning out quarterly profits that meet analyst expectations while growing at 61% per year over the past five years, and expected to grow another 35% over the next five years, end up at #18 on the Sabrient VCU short ranking?
The fact that Michelle Stacy, President of Keurig (patented single cup brewing technology for GMCR), exercised 30,000 options at $6.20 on August 13, 2010 and simultaneously sold the shares on the open market at $30.95 for gross proceeds of $928,500, again exercised 5,000 options at $6.20 on September 13, 2010 and simultaneously sold the shares on the open market at $35.40 for gross proceeds of $177,000 and a week later exercised another 5,000 shares from $6.20-$9.14 and simultaneously sold the shares on the open market at $37 for gross proceeds of $185,000 alone isn’t enough to raise any eyebrows or red flags.
There are many reasons that insiders may sell shares which have nothing to do with their perception of the company's prospects or valuation. However, when a week after the last insider sale the company discloses that the SEC is inquiring into the company's methods for accounting for revenues, it starts to look a bit more dark and mysterious. It is worth…
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site