Due to recent heavy drop in the share price Green Mountain Coffee Roasters Inc. (GMCR) we decided to reinitiate a position at the price of $25.67, which we believe to be quite fair.
Last year we bought and sold our position within a relative short time frame as the share price was quite volatile and fluctuated between our buy price and sell price range very quickly. We have kept our eye on the stock price looking for a good entry point once again.
Our feelings on the company have not really changed since last year. We think the business is relatively stable even though the share price may not be.
The biggest issues have been the expiring patents and the accounting irregularities which seem to be quite overblown. It seems that when there is bad news people are very quick to sell without regard to how much the news really impacts the business and likewise with the good news.
We will watch the price and there is a significant increase will most likely sell once again as it doesn’t usually take long for this stock to become overvalued.