Update of my position in GMCR
Labels: Company analyses
Where the science of investing becomes an art of living
A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!
Labels: Company analyses
Reports Q2 (Mar) earnings of $0.50 per share, $0.14 better than the First Call consensus of $0.36; revenues rose 60.0% year/year to $193.4 mln vs the $178.1 mln consensus. Co issues upside guidance for FY09, sees EPS of $1.47-1.53, excluding non-recurring items, vs. $1.31 consensus; sees FY09 revs of $790-805 mln vs. $722.27 mln consensus. Co says its Keurig Single-Cup brewing system drove very strong sales and earnings growth.
On its earnings call, co says:
• This was the 11th consecutive qtr with at least 39% top line growth.
• Wal-Mart will carry Keurig's Elite B40 Single-Cup Brewer and a variety of K-Cups. This significantly expands the company's retail presence.
• Calls in-home coffee brewing a revolution.
• Results were outstanding even following the strong holiday results last qtr.
• Operating margins were much higher due to lower % for SG&A.
• For FY10, co expects to guide on its next earnings call.
• Upside from qtr was from Keurig and K-Cup sales at the retail level. Prospects for Q3 and Q4 remain very positive. Keurig was the only major brand to post such strong growth.
• Expects to expand its K-Cup production from 2 mln per week to 8 mln per week by this fall.
• Has not seen a significant production capacity investment from its key competitors, not expected to happen through the holiday season this year.
•Guidance does include Wal-Mart deal.
• In any given qtr, brewer unit growth can vary due to a number of reasons.
• Making good progress on the grocery store front, as it is currently in 3,800, but the goal is to get to 15,000 locations. This means more grocery stores and more products sold at each location. Tully's is in 5,000 locations already so that's a platform for Keurig to roll out into. Those would be all incremental locations for Keurig.
• Gross margin will not change now that Wal-Mart is a customer.
Labels: Company analyses
Likely the first item to catch your eye in the chart above is the continuing major and primary up trend from $1 in 1999 to $53 ten years later (today). The second item that might catch your notice is that the stock has risen, or at least not declined, during primary bear markets (e.g., 2000-2002, 2007-2009), which qualifies the stock, and company, as a market leader. The third item you might notice are the lengthy bases (2001-2006, 2007-2009) that interrupt, but do not impede, the stock's continuing primary up trend. The fourth item that likely escapes your notice is that trading volume increases, despite the ever-higher share price; decidedly bullish price and volume action.
Big Base Breakout
The past 18 months (see chart below) show another big base, or high level consolidation, for Green Mountain/GMCR... until the shares broke out and up last month (March); right now all trends -- short, intermediate, and long term -- are in gear to the up side.
Paradoxically, his easy awareness of people's inner lives has left him isolated and alone. "Without it I might have been a happy nobody instead of a dismal one." Only when he probes deeply into a person, down past the surface personality into the unconscious, does Selig find that his power brings him an experience of nirvana-like, oceanic oneness. Yet now his special gift has grown temperamental, as variable as the weather. But what can he do? "Powers decay. Time leaches the colors from the best of visions. The world becomes grayer. Entropy beats us down. Everything fades. Everything goes. Everything dies."and...
Now widely regarded as Robert Silverberg's masterpiece, "Dying Inside," ... is hardly what most people think of as science fiction. As a character, Selig has more in common with Philip Roth's Portnoy than with the more typical superwarriors of, say, Robert Heinlein's "Starship Troopers." Instead, Silverberg's novel offers an eerily evocative picture of New York life in the late 1950s and '60s: a time of bisexual professors, swinging singles, Black Power, psychedelic drugs and all-round social and political upheaval. Given Selig's bookishness, the novel is also suffused with buried quotations from T.S. Eliot, James Joyce, Samuel Beckett, Lewis Carroll, Shakespeare and many other literary eminences. Above all, though, "Dying Inside" is a pleasure to read, full of that dry humor so common to melancholic intellectuals. Selig's taste in music, we learn, runs to "pretty austere stuff, thorny, inaccessible: Schoenberg, late Beethoven, Mahler, Berg, the Bartok quartets, Bach passacaglias. Nothing that you'd be likely to whistle after one hearing." At one time he contemplates writing a novel about -- what else? -- alienation in modern life... It's insane that "Dying Inside" should be subtly dismissed as merely a genre classic. This is a superb novel about a common human sorrow, that great shock of middle age -- the recognition that we are all dying inside and that all of us must face the eventual disappearance of the person we have been. More and more, as time goes by, our bodies break down, our minds start to lose their quickness, and, suddenly, inconceivably, our best work is behind us.Read Michael Dirda's entire review (below) of DYING INSIDE, and see whether he does not convince you to read the best science fiction novel yet written, and, arguably, one of literature's all-time great works of art. (btw, Michael's online book discussion also is worthy of your time as is his recent book, Classics for Pleasure.)
Interesting, no? (Thanks again, "Rob"!)
-- David M Gordon / The Deipnosophist