Simple Stock Watch: GMCR

I almost didn’t write this post. That’s how tired I am of hearing about Green Mountain Coffee Roasters.

Nothing to do with the product – the Keurig K-Cups are pretty cool, and have proven to be a convenient and tidy way to brew a great cup of joe.

My GMCR fatigue has more to do with the fact that it’s been a great-performing stock for the better part of a year!

I’m being a little facetious. Green Mountain continues to outperform the major indexes. But this is a stock that’s like the old Eveready Bunny: Still Goin’!

Take a look at this chart: Green Mountain has been its consolidating its most recent price gains since late January. It’s corrected about 10% since its January 29 high of $88.65. That’s just fractionally more than the S&P 500 has corrected since January 20.

Why is that something to be enthusiastic about? Because growth stocks often correct about two or three times as much as the general market in a downturn. So the fact that Green Mountain has trended along with the major indexes is encouraging.

Yeah, I joke about being tired of this stock. But the truth is, I made a lot of money on this back in May, 2009. I bought it in early April, after it had broken out of a cup-with-handle base and was consolidating some of those early gains.

That doesn’t mean it’s an old friend, though! Stocks have to keep proving themselves, over and over again. Just because it once made money for you, doesn’t mean you should keep returning it for old times’ sake.

Green Mountain, however, still shows the kind of fundamental strength that you tend to see in big growth winners. Earnings increased at a rate of 170% in the most recent quarter, and Wall Street expects 79% profit growth this year and 40% growth in 2011. Sales jumped 77% most recently.

Combine that with the solid chart action, and this is one we’re eyeing. Look for it to pass that previous high of $88.65 in big volume.

Related posts:

1. Simple Stock Watch: GMCR Green Mountain Coffee Roasters is still a strong brew. The...
2. Simple Stock Update: GMCR Green Mountain has been brewing, and on Tuesday, you could...
3. Simple Stock Watch: RAX Rackspace Holdings (RAX) has corrected along with the general market....
4. Simple Stock Watch: PCLN Safest thing to do right now: Wait out the downturn,...
5. Simple Stock Watch: MELI Mercadolibre (MELI): This is an Argentina-based online retailer that does...

The information in this article is provided for informational purposes only and should not be considered direct investment advice.  No guarantee is made that the strategies or securities discussed herein will be profitable. The information provided reflects the views of the author as of a particular time and are subject to change at any time without notice.