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    Green Mountain Coffee Continues To Defy Skeptics, Hits All-Time High

    By Zacks.com | Forbes – Mon, Aug 1, 2011

    Green Mountain Coffee Roasters (GMCR - Analyst Report) continues to defy the skeptics, hitting a fresh all-time high after reporting another great quarter that came in ahead of expectations. With estimates jumping higher on the news, this Zacks #1 Rank stock is brewing with momentum.

    Green Mountain has been a momentum high flyer for the last 12 months, hitting a string of new highs in spite of skepticism about the sustainability of its growth trajectory. That trend continued on July 27 when the company reported another great quarter that came in well ahead of expectations.

    Third-Quarter Results

    Revenue for the period was up 127% from last year to $717 million. Earnings also looked great, coming in at 49 cents, 36% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 20% over the last four quarters.

    The great quarter was driven by strong results from the company's Kuerig brewing system, with sales up 66% to $105 million, and its individual brew packets, where sales jumped 136% $485 million. With those kinds of gains in hand, its clear what is fueling shares and the lofty valuation.

    Estimates

    We have seen some solid movement in estimates off the good quarter, with the current year gaining 18 cents to $1.65 while the next-year estimate added 42 cents to $2.60, a bullish 58% growth projection.

    Valuation

    On the valuation front, contrary to popular opinion, GMCR looks reasonably priced, with a PEG ratio of .88, safely below the benchmark of 1 for value.

    Special Offer: Since the launch of Forbes Growth Investor in October 2000, its Top 40 Model Portfolio is up 129.4% compared to a loss for the same period of 5.5% for the S&P 500. If you’d had $100,000 in your portfolio to begin with, the difference now would be $133,330. Click for the latest recommendations in Forbes Growth Investor.

    On the chart, shares gapped higher on the good quarter for a new 52-week high.

    This Week's Momentum Zacks Rank Buy Stocks

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    Precision Drilling (PDS - Snapshot Report) recently surged to a new multi-year high after its second quarter results showed big gains from last year. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock has the right tools for momentum. Read Full Article.

    Polaris Industries (PII - Snapshot Report) recently jumped into a new all-time high after reporting strong second quarter results that included a hefty 16% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock has more than a recreational interest in momentum. Read Full Article.

    Complete Production Services (CPX - Snapshot Report) just jumped into a new all-time high after reporting awesome second quarter results that came in well ahead of expectations. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock has some serious momentum. Read Full Article.

    Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.

    Read the full analyst report on GMCR

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