I'm glad to hold a position in this company for the long term because I genuinely believe it will provide a boost for my portfolio. I think a lot of value can (and will) be created here through smart, consistent, well-disciplined-yet-growth-oriented management and the retention of the strong ratios found on their balance sheet.
Nice posts business guy and good call on holding tight despite last night's guidance. I too believe this is a solid company, and it seems like this is a stock to hold rather than trade based on its long-term prospects.
I thought about it for a bit, and I actually couldn't agree more about Caribou becoming an acquisition target. Of course we can only speculate at best, about such a thing - but management seems pretty excited about how the Caribou brand appears to be resonating on an international level. I think that's quite an important factor to contribute to prospects for an acquisition by one of the big players.
I must admit that I was quite optimistic prior to earnings regarding a possible jump in the share price to between the $12.00 - $12.50 range, because I did not anticipate the impact of the shifting of their channels. I am, however, still optimistic about the coffee deflation that will provide a boost for cash flow and reduce COGS - and am excited to see where management will reinvest it. Management cares about its shareholders too, and I believe that this is why they purchased 750,000 shares over the prior quarter. This is quite revealing of their confidence and reiteration of their loyalty to shareholders.
I think management should retain that cash on their balance sheet and focus slightly more on capital expenditures. This company is going to have some excellent purchasing power in the coming quarters and I think management has their eyes open.
It's definitely the subpar guidance that appeared to spook some people away here. I wouldn't worry about it. Coffee commodity costs will work themselves out eventually. Caribou Coffee is focused on growth, albeit in a conservative manner, which is a smart move in the current economic environment. Look at their quick ratio. There are variations of the quick ratio depending on which items on the balance sheet you use, but in every case, their quick ratio is over 2.
Good company. Stable finances. Cautious and smart management that focuses like a laser beam on solid, consistent growth. Growing popularity. What's not to like? I'm happy with my 300 shares.