Comments on: GMCR Bulls Bite Back http://www.fusioninvesting.com/2010/01/gmcr-bulls-bite-back/ Fusing Fundamental and Technical Analysis with lashings of Behavioural Finance. Investing in Australia and North America. Thu, 02 Feb 2012 06:57:27 +0000 hourly 1 http://wordpress.org/?v=3.2 By: Kirill Jacobson http://www.fusioninvesting.com/2010/01/gmcr-bulls-bite-back/comment-page-1/#comment-1538 Kirill Jacobson Thu, 14 Jan 2010 02:40:54 +0000 http://www.fusioninvesting.com/?p=4718#comment-1538 You are right, it is one tenth of 4 Billion k-cups per quarter. The annual report states "during fiscal 2009, 1.6 billion K-Cup portion packs were shipped". I will wait for a final jam after the earnings and then consider writing naked calls into a sleepy spring/summer season. Puts are expensive especially after yesterday's dump and today's bump You are right, it is one tenth of 4 Billion k-cups per quarter. The annual report states “during fiscal 2009, 1.6 billion K-Cup portion packs were shipped”. I will wait for a final jam after the earnings and then consider writing naked calls into a sleepy spring/summer season. Puts are expensive especially after yesterday’s dump and today’s bump

]]> By: Dean Morel http://www.fusioninvesting.com/2010/01/gmcr-bulls-bite-back/comment-page-1/#comment-1535 Dean Morel Tue, 12 Jan 2010 09:03:25 +0000 http://www.fusioninvesting.com/?p=4718#comment-1535 Hi Kirill, thanks for your comments. Like you I'm not willing to short outright. I have only shorted one share before and that was a hedge on a large solar position I held. I shorted what I considered a bad solar company and held on to my STP. I'm looking to buy puts on GMCR at some point. Munarriz is an excellent investor and picked GMCR for TMF Rule Breakers. I'd normally place more weight on his views, but I feel he is simply defending his pick. TMF newsletters are good as far as newsletters go, as they teach their subscribers so much along the way and the subscriber boards are good. Though I don't recall Rule Breakers ever selling out close to the top of anything. I agree that a turning point feels very close and am considering GMCR as a market hedge, but not before their Q4 earnings as the bar seems to set low and brewers may have been a popular Crissie present. The 4 Billion K-cup reference I quoted is for the total ever sold, not per quarter. Hi Kirill, thanks for your comments. Like you I’m not willing to short outright. I have only shorted one share before and that was a hedge on a large solar position I held. I shorted what I considered a bad solar company and held on to my STP. I’m looking to buy puts on GMCR at some point. Munarriz is an excellent investor and picked GMCR for TMF Rule Breakers. I’d normally place more weight on his views, but I feel he is simply defending his pick. TMF newsletters are good as far as newsletters go, as they teach their subscribers so much along the way and the subscriber boards are good. Though I don’t recall Rule Breakers ever selling out close to the top of anything.

I agree that a turning point feels very close and am considering GMCR as a market hedge, but not before their Q4 earnings as the bar seems to set low and brewers may have been a popular Crissie present.

The 4 Billion K-cup reference I quoted is for the total ever sold, not per quarter.

]]> By: Kirill Jacobson http://www.fusioninvesting.com/2010/01/gmcr-bulls-bite-back/comment-page-1/#comment-1533 Kirill Jacobson Tue, 12 Jan 2010 05:27:43 +0000 http://www.fusioninvesting.com/?p=4718#comment-1533 Dean, I like your post and think along the same lines. I consider GMCR over priced and, although I am not brave to short it out right, I would not recommend to go long. I wonder how far this stock can go? For a moment let's imagine that the company achieved its dream of "multiple brewers per household" and an every man, woman and child in America drinks two k-cups a day. It translates to 60B (yes with the "B") k-cups a quarter or 15 times what the company sells right now. You can expect 20 dollars in earnings (1.39 x 15). At this point the market will be completely saturated with no room to grow (except oversees) and the company would hardly deserve a PE of 12 and the stock price of 240. Do you think this scenario would ever happen? I seriously doubt that. The company doesn't expect market penetration of more than 15%. It means 9B k-cups a quarter (twice the current number), earnings of 2.80, PE of 20 and the stock price of 60. Right now expectations for the stock are too high and a downside risk doesn't warrant a potential reward. I think we are close to the turning point: a plateau or a nose dive. With best regards, Kirill Dean,

I like your post and think along the same lines. I consider GMCR over priced and, although I am not brave to short it out right, I would not recommend to go long. I wonder how far this stock can go? For a moment let’s imagine that the company achieved its dream of “multiple brewers per household” and an every man, woman and child in America drinks two k-cups a day. It translates to 60B (yes with the “B”) k-cups a quarter or 15 times what the company sells right now. You can expect 20 dollars in earnings (1.39 x 15). At this point the market will be completely saturated with no room to grow (except oversees) and the company would hardly deserve a PE of 12 and the stock price of 240. Do you think this scenario would ever happen? I seriously doubt that. The company doesn’t expect market penetration of more than 15%. It means 9B k-cups a quarter (twice the current number), earnings of 2.80, PE of 20 and the stock price of 60. Right now expectations for the stock are too high and a downside risk doesn’t warrant a potential reward. I think we are close to the turning point: a plateau or a nose dive.

With best regards,
Kirill

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