My reasoning is simple. The company's early February earnings report was mixed. While the company beat in terms of revenues and earnings, fiscal Q2 guidance was poor. Additionally, the company's large cash flow was due to a lack of inventory restocking and the company not paying its bills.
By the way if you are not privy to, even Mr Seth, known to some as Mr Jeckll & Hyde, has informed us lay people that another big player is negotiating with the company.
My advice cover soon and save you tears & $@$@$@
If you have not noticed, go back to SEC filings for the last few years and you will find that K-Cup eq unit growth is somewhere in the region of 2.5 to 2.8 billion cups per annum, irrespective of the brewers sold and this trend is going to continue for several years hence. This translates to K-Cup revenue growth of $750 -840 million per annum. As a bonus brewer sales to first time customers are a bonus since these newbies will contribute to additional K-Cup purchases.
True that some Keurig owner would migrate to knock offs but this too will be of a transcient nature when they realise that the KO's lack quality.
This time, next year they would all be buying GMCR products.
It is widely acknowledged that sales from 2nd Qtr were brought forward into the 1st Qtr. If there is any truth in that, then 2013 1Qrt results are understating the real growth figures. By my estimate K-Cup growth was more like 28- and not 17% as stated in the ER. This understatement will redress itself in the 2nd Qtr ER.
Pls hod on to your pants- very tightly and your @$@$
You are being selective- Did you not notice the reduction in Long Term Debt. by +$120M? I think all the naysayers using a double edged sword to fuel their delusions. Since sS-Hithorn's presentation in 2011, the likes of Antar & cabal had been knocking the company for mismanagement of inventory. Now the the company has arrested its operating profits and productivity gains and is now able to better manage its inventory levels and other operational metrics we are now hear futile arguements " that the company's better than expected performance is on account of "lack of inventory restocking and the company not paying its bills"
This is utter #$%$ from those who have no understanding of running any company let alone a company that is experiencing stellar organic growth in during double dip recession.
And your simple reasoning is ripped from the article "5 Names Seeing Significant Short Covering" published by Seeking Alpha today at 10:31 AM EST. You are parroting a position that has no authority to support it.