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Keurig Green Mountain, Inc. Message Board

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  • chrisnd01 chrisnd01 Jan 8, 2011 11:37 AM Flag

    Tick tick tick tick ...

    Can you read a financial statement?

    Other than clicking on a cash flow summary link from Yahoo Finance?

    Spend some time learning to understand financial statements. If you do, you'll be able to see where the cash is being used.

    It isn't a mysterious fraud. It also isn 't rocket science. Growth companies require investment in inventories, Cap-Ex, etc. Investment in inventory flows through the cash flow statement. There you will find your answer.

    Now, you can make an argument that demand won't materialize at levels that absorb all the inventory. That could be a problem from a profit standpoint. But its not fraud. And it isn't a mystery where the cash is going.

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    • seangorham Jan 8, 2011 11:58 AM Flag

      The issue of accounting errors - by my count we are now up to about 8 with all the restatements, possible insider trading, inventory mismanagement, and buying growth they already own is an odd way to grow or run a company.

      The misconduct, or lack of, will be decided when the SEC compltes its investigation. If I recall, it was ack in early November that GMCR claimed the investigation was almost over. GMCR also warned investors that more restatemens maybe coming in the future.

      Then add in the premium one pays for a cup of K, v. a pond of almost anything, the market being invaded by other companies with much deeper pockets, high debt load (once the recent takeover is budgeting in), the jury is till out on GMCR.

      I have owned GMCR since the early 90's, and have been pleased with my return, however, I have sold all but a few thousand shares in order to take some profits and put them to work in other investments. For the first time, I have a stop loss on my holdings of GMCR for down side protection. At the current levels, the downside is greater than the upside potential.

      GMCR used to be a rather stable, sure growth company, now it seems to have attracted to much attention - making the stock a bit to wild for my comfort level.

    • Chris, the mystery is what have GMCR done to prevent the mistakes from repeating? Normally the BOD insists on answers and takes action, like replacing CFO, Controller,etc. GMCR is in a small town in VT but they better get some big town mgmt or there will be a drag on stock value.

      There is also some mystery surrounding patent issues that is dragging on the stock price.

      It's all part of growing from small co to a bigger one. Maybe acquisition is the answer? Its not rocket science, just management 101. From a fmr CFO and Big 8 ptnr. BTW I'm long a small position in GMCR.

      • 1 Reply to clamdigger_97
      • Clamdigger, I agree with you. I have concerns about the accounting and financial systems. I think they are weak, not fraudulant. Management is very good at strategic thinking. They are very poor with operations and fundamental execution.

        I think the management has done a good job up until this point. But, it seems the company has grown beyond the capability of current management. Acquisitions are difficult to integrate. The only people who don't think that is the case is people whi either have never done it, or whom have never done it effectively.

        The patent concerns are legit as well.

        My point to CausticFred is that he is trying to paint a picture of mysterious disappearance of cash. I don't disagree that the company had negative CFO for certain quarters, I just think you can look at the balance sheet and cash flow statement and see where the money was spent. Inventory increase was enormous as they prepared for the winter season. CapEx is high and they keep acquiring companies. I hope they are done doing that now and just start executing better.

        As far as the SEC investigation, there is no official 'end' to it. It will either be turned into a formal investigation if they find fraud. Or, it will quietly go away. I doubt there will be closure oterwise. And if so, it could be many quarters from now because if the SEC has a concern I'm sure they are going to want to see the improvements to the accounting systems from here.

        In spite of my concerns, I am long the stock. I think the negatives are known and management has outsmarted some big players (Starbucks, Kraft, etc) to dominate single serve. Hats off for that but now it's time to either sell the company or bring in some more qualified finance professionals.

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