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Investing in Keurig: GMCR growth

If you are a Keurig owner, it may be a good time to consider investing in it parent company, Green Mountain Coffee Roasters. They make a fantastic product in the Keurig and their own single cup coffee blends; why not own a slice of such a great company whose products is enjoyed by so many? And now may be a good time to invest.

Green Mountain Coffee Roasters (Nasdaq: GMCR) are one of the market's recession-bucking growth stocks. They declared stock splits late last week (late Apr 2010). GMCR is opting for a 3-for-1 exchange to get the Keurig specialist's shares back into $20s.

Wikipedia says "A stock split is a decision by the company's board of directors to increase the number of shares that are outstanding by issuing more shares to current shareholders."

A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

The bottom line is a stock split is used primarily by companies that have seen their share prices increase substantially and although the number of outstanding shares increases and price per share decreases, the value of the company does not change.

Green Mountain has certainly seen recent growth, with K-Cup shipments soaring 82% in the previous quarter. This underlines the popularity of Keurigs great single cup coffee brewers, driven by the popularity of their large range of great coffee varieties. Keurigs singel serve coffee machines are expert in providing delicious coffee conveniently quick and with no mess or cleaning up, substantially cheaper than Starbucks or other coffee shops.

Their products are popular and growth is expected to continue. If you are interested in investing in the stock market and are a Keurig fan, GMCR make a good choice. Its kind of like everytime you drink a coffee from a Keurig, you are driving growth in your own company!


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