Bull of the Day: Green Mountain Coffee Roasters

One of the stock market all-stars in recent years has undoubtedly been Green Mountain Coffee Roasters (GMCR - Analyst Report).

The Vermont-based company burst onto the scene with its wide variety of coffees, teas and other beverages that often come in single serve packs, an innovation that helped propel the company to fame. However, increased competition as of late has made investors sour on the company, pushing GMCR’s stock well off of its lofty heights.

The company has fought off this competition though, and it continues to make a name for itself with its at home brewing accessories leading many to think that the firm is back on track. This is further confirmed by recent trends in the stock price, and some solid news on the estimate front which both suggest that the company is out of the doldrums and back on its way towards prominence.

In fact, GMCR has seen its stock price soar in the trailing three month period, with gains approaching 70% in the time frame, although it still has a ways to go before eclipsing its 52 week high. We believe that the company could be back on track to doing this, as earnings estimates have been soaring as of late making the company an interesting candidate for investors seeking a fresh play in 2013.

After all, GMCR is now sporting a Zacks Rank of 1 or ‘Strong Buy’ and a Zacks Earnings ESP of 3.1%. These figures suggest that upcoming earnings could be favorable for the company and that the firm has plenty of room to run.

There is also nearly universal agreement on the company and its prospects for the coming year, at least when looking at analyst estimates. With 12 analysts following the stock, we have seen 11 revisions higher for both the current quarter and the next quarter earnings reports, while we have also seen 15 revisions higher for the current fiscal year.

If that wasn’t enough, the Zacks Industry Rank is also extremely favorable; the industry is currently in the top 10 of the 265 industries that we rank, suggesting a solid trend not only for the company, but for the broader food item space as well.

Bottom Line

GMCR has some significant wind at its back both in the form of bullish trends in its earnings estimates, as well as in the larger sector. Thanks to this, and some reasonable valuations due to last year’s collapse, now could be the time to give Green Mountain a closer look, so long as you can endure the high volatility that comes with this Top Ranked pick.