Green Mountain Coffee Roasters
Click to Enlarge Tucked away in Vermont, Green Mountain Coffee Roasters (NASDAQ:GMCR) brands, produces and sells approximately 200 varieties of coffee, cocoa, teas and other beverages. The company is synonymous with its Keurig single-cup coffee machines, as the K-Cup portion packs are their bread-and-butter business. This company is a favorite of the shorts as it is down 18% for the year.
Short interest on GMCR was sitting near its highs of 13 ahead of earnings this week — a dangerous proposition for a short seller. Unexpectedly, GMCR reported earnings that were better than expected earlier this week, triggering a rally in the stock that had to have shaken out the shorts.
From my perspective, the term “blind squirrel finding a nut” feels about right.
GMCR shares are more than 45% higher than before the earnings report, with the shorts likely having already moved out of their positions. We expect this to be a speed bump on an otherwise wretched stock chart; the shorts will start initiating new positions on GMCR as the shine dulls from this week’s earnings news.