Green Mountain Scales Heights

Green Mountain Coffee Roasters, Inc. (GMCR - Analyst Report) has announced that its Board of Directors approved a three-for-two stock split. Normally a stock split is not news-worthy, but these are not normal times. We are experiencing a 50-year event in terms of the economy and stock performance.

During times of dramatic stock declines (we are still 42% below the S&P 500 closing peak of 1,565.15 on October 9, 2007), long-term investors should be on the outlook for stocks that are outperforming and those that exhibit fundamental stability. The latter point was expanded upon in a blog last month about targeting stocks whose dividends are being increased.

The former point can be highlighted by seeking stocks that have outperformed to such a degree that Boards declare stock splits. Green Mountain Coffee Roasters exemplifies this level of outperformance. In the time the S&P 500 has declined 42%, Green Mountain Coffee Roasters has rallied 161%.

Green Mountain Coffee Roasters is a growth company in the premium coffee and tea industry. Management is implementing a growth strategy based on a multi-channel geographic penetration business model. The company is expanding geographically and by adding new relationships. The company has generated 25 consecutive quarters of double-digit sales growth.

Aiding the company’s growth has been the acquisition of Keurig, a gourmet single-cup coffee company, in June 2006. In addition, the company acquired Tully’s coffee brand and wholesale business in March 2009.

Headquartered in Waterbury, Vermont, Green Mountain Coffee Roasters is a provider of premium, specialty coffees through multiple wholesale distribution channels and also to the single cup brewing industry.

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