Green Mountain Coffee Roasters (GMCR)
Guys what's up with GMCR? Is the stock finally done plummeting after Einhorn's sweet short call? I love their products which I think is making me unknowingly biased, but I'm looking at a 11.2x P/E ratio and I feel like it's not a bad time to jump in. I'd be looking to hold the position for at least an earnings cycle or two. I know that they also have an upcoming patent issue in September when their K-Cup patent is up. That fact alone is making me very hesitant to invest in the company.
What do you guys think about GMCR?
"In the real world, most assets that look cheap on a multiple of earnings basis deserve to be cheap." - Aswath Damodaron
So a corollary to that would be that assets that look expensive deserve to be expensive? So I should buy IMAX then at 50x earnings?
"I will only buy good companies at a good price, a good company may not be trading at a cheap price" - Aswath Damodaron
to much competition now that patents expire
I got long GMCR at $19 for many of the same reasons you mentioned. I am concerned about the patent issue, but they have some acquisition targets and a very good product that people like.
I love their products, but I hate the company. Take your love for the product out of the equation of the trade or you will loose money. Wait for it to drop a little more, and for the shorts to cover. I think this stock is overpriced if you want to get a good return out of it, and if you're patient you might make money. However, I caution you on this stock based on their past performance. There are plenty of better ones out there.
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