Thursday, November 10, 2011

Attention All You Scam Dogs and Momo Mamas: "Actionable Call Alert: Green Mountain Coffee - Bounce?" (GMCR)

In very early premarket action the stock is down $19.42 (29%) at $47.60.
The first half of the headling is the title of a book by John Emshwillerof the WSJ.
Green Mountain lost its momo mojo on last nights earnings release.
From Notable Calls:
Geen Mountain Coffee (NASDAQ:GMCR) trading down 30%+ following results and guidance reported last night.

- Most analysts are defending the name.

- Canaccord analyst Scott Van Winkle highlights something I would like to share with you:

'...A bear would argue that our (positive) opinion is shaded by our rose colored glasses. Well, we heard people saying the exact same thing in the exact same situation in Hansen Natural (HANS : NASDAQ : $90.09 | HOLD) in May 2010. We remember this so clearly because the HANS correction last May was the greatest buying opportunity we have ever seem on a timing issue around a price increase and the greatest miss we have ever had as a sell-side analyst. HANS instituted a price increase in January 2010 that led to massive buying by distributors ahead of the increase and even though the company knew there was a channel load, it didn’t realize how significant the buy-ahead was. Sound familiar? The result was that HANS crushed Q4/2009 results and then missed the subsequent Q1/2010 estimates by an even wider margin than GMCR’s relatively modest miss last night. HANS shares plummeted from near $45 to as low as $25 intraday....MORE 
Do keep in mind this truism from last June's "Barack H. Obama The Trader-in-Chief":
...“This is analogous to shorting a momentum stock,” added Weiss, a veteran trader who at one time co-managed Steve Cohen’s legendary SAC Capital. “Astute investors don’t short momentum stocks as they climb purely on valuation because the market can stay irrational longer than an investor can stay solvent. However, once the momentum breaks and fundamental reality sets in, the shorts go after the equity like bees to honey.”.