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Author: TMFHelical Big gold star, 5000 posts Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 598  
Subject: Pop on short covering Date: 8/3/2012 11:16 AM
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Green Mountain recently reported and got a nice pop, apparently as shorts covered. I only read the press release, but got a 'nothing to be excited about vibe'.

http://investor.gmcr.com/releasedetail.cfm?ReleaseID=697363

Net sales were up year over year by 21%, but we do have the patent expirations pending, so I expect competition to at least stess margins moving forward.

GMCR's Board of Directors has authorized the Company to repurchase up to $500.0 million of its common shares over the next two years,

This is probably the pop. But .... they don't have $500M (unless they buy shares with inventory) and 'authorized over next two years' is pretty non committal. I wouldn't feel confident it will happen. Gamed the stock pretty effectively.

Prepared remarks
http://files.shareholder.com/downloads/GMCR/2003167474x0x587...

Slide deck
http://files.shareholder.com/downloads/GMCR/2003167474x0x587...'12Slides%20FINAL!.pdf

Growth is slowing, (4)
Gross margins have grown in the past, but may be reversing (6)
Cash flow was modest at best (9)
Capex may have peaked in 2012 (11)
US market pretty well saturated (13) [This slide was a key for me always]

I don't own so I don't plan on listening to the call. If I did own, I'd want to know how they plan to pay for the share buyback, and how much of a dud the 'new brewer' has been.

Ralph
Helical Investor
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