Wait until coffee hits $3/lb. That may happen in the next few months. Last time that happened, JVA went to $35/share and about the same # of shares as they have today.
Vietnam sells the more bitter coffee than the Brazilian Arabica beans, but if prices were to rise too quickly, coffee shops could buy the less preferred Vietnamese coffee beans.
This news, however, came out this morning.
By Agence France-Presse
Friday, March 14, 2014 9:24 EDT
Extreme weather conditions are hitting coffee production in Vietnam, the world’s largest exporter of low-end robusta beans used in instant coffee, an industry official said Friday.
Severe cold and drought saw Vietnam’s coffee production in the 2013-2014 crop tumble eight percent on the year before, Do Ha Nam, Vice President of the Vietnam Coffee-Cocoa Association (VICOFA) told AFP.
Higher-quality arabica beans have also been severely affected by continuing low temperatures in the north of the country, he said.
Vietnam is the world’s second-largest coffee producer and is seen as high volume rather than high quality — its bitter-tasting robusta wins few accolades internationally and is mostly exported as raw beans.
People will always buy toilet paper and coffee. JVA may not be entirely immune to a stock market correction but I don't think things have ever gotten bad enough in history where people stopped buying coffee. Maybe the Great Depression, I wasn't there.
My wet dream is if short sellers are her, because that will make the stock go parabolic. I don't have a long history here, owned it for about 2 weeks. However, if some people have held onto this for years, they may be selling now and glad to get rid of it and that will be a temporary overhang.
However, we know the deal with this stock and my views aren't tainted by years of frustration like some others that are/were here. It depends on coffee prices and I just don't see them falling anytime soon.
Are you kidding? JVA is getting ready to triple and I am dead serious. Coffee is experiencing a disruption in both Brazil and Vietnam, which accounts for the majority of worldwide sales. Coffee prices are up 70% since this earnings report ended so earnings will be double or triple next quarter. And here's the best part, there's only 7 million shares. The momo players haven't even shown up yet to take this parabolic and that is coming.
Net income of $1,371,740 or $0.22 eps when coffee prices were the lowest in 7 years!
"With coffee prices now on the rise again, we believe the combination of higher commodity prices along with continued growth in our overall business should result in increased revenues."
JVA picking season is officially open. This stock will be unleashed very soon.
The coffee story is even worse than weather-related. Read:
REUTERS Mar 13, 2014 8:58PM
Brazil declares emergency in main coffee growing state on insect threat
"SAO PAULO - Brazil's Agriculture Ministry declared a state of emergency in Minas Gerais, the main coffee-producing state, due to the threat of a crop-damaging insect known as the coffee borer, the government's national gazette said on Thursday. The ministry justified its decision by saying that the insect poses a threat due to its "short life cycle and potential for a major proliferation.
Minas Gerais accounts for half of the coffee produced in Brazil, itself the world's largest supplier of Arabica coffee."
Earnings probably won't be good for the quarter ended Jan 31. That's because coffee prices were extremely low until 4 days left in the quarter. Today, coffee prices are 70% higher than at the end of the quarter.
Remember that coffee prices were the lowest since 2006 at the start of the quarter so for me, the earnings report will be all about guidance and not so much about the actual earnings themselves.
I am expecting mediocre earnings but a very upbeat forecast for next quarter, some positive comments going forward and a vastly improved earnings report next beginning next quarter.
(Based on history, I expect earnings to be released today but it could be after the market close).
Hate to tell you this. Up 8 points this week and it's only getting started. Way more upside to come.
It won't be coincidental. It's been my experience that the REASON for the extremely low implied volatility was knowledge that news is coming.
Just as an example. I own a couple of oil stocks that saw extremely strange selling activity the past 3 days...and today, it was announced their was a huge surplus in oil supplies which sent the price of oil plummeting. Traders knew the price of oil would plummet days before the public knew about it.
When AAPL soars higher, and my guess it could start tomorrow, it doesn't have to be on news. BUT...if news is announced with the move, it won't be a coincidence.
Do you read charts? Something big is about to happen and a lot of people are talking about it.
Also, AAPL implied volatility hit a historic low a couple of days ago. The three times in it's history that IV traded near this low, AAPL went up 10% in less than 10 days. EVERY single time.
Here's the chart
REUTERS REPORT PREDICTS COFFEE TO REACH $3.00/LB. LAST TIME COFFEE HIT THIS LEVEL, JVA WAS $35.
March 11, 2014
"How bleak is the current coffee shortage? According to a separate Wall Street Journal article, Brazil accounts for one-third of the world’s coffee. Moreover, “It produces a wide variety of beans, from robusta used in instant coffee to higher-end varieties of arabica coffee that end up in gourmet blends.” A drought and scorching temperatures have caused what rain that falls to evaporate rather speedily, according to the Journal, thus providing no relief.
Apparently, the effects on price might not be short-lived either. A Reuters report claimed that we could still be feeling the sting of the drought in Brazil and elsewhere two years from now: “An arabica deficit in 2014/15, compounded by the unquestionable knock-on impact on the 2015/16 season, given it is an ‘off’ and therefore potential deficit season anyway, would be fuel enough to increase the chances of the 300 cents/lb level.” The price is currently around $2, or 200 cents, so there’s a long way to go before we see $3."
Yes, JVA hit $30 at the same time that coffee prices were at their peak for many years. Looking at a 20 year chart, coffee prices tend to peak quickly and fall just as quickly. However, the drought in Brazil is being called the worst in 40 years. That will do damage to this year AND next year's crops. That is why I believe coffee prices won't fall as quickly as they have in the past, and this gives JVA a great chance to report great earnings that are sustainable.
In 2011, coffee prices were $3.00 at their peak. Today, they are $2.06 (just rose from $1.00 at the end of 2013) so prices have skyrocketed quickly.
If coffee prices go back to $3.00, JVA will double, triple or more very quickly because their earnings will skyrocket and momentum investors will pile in here but there's not many shares available. If prices stay around $2, the stock will still double or triple but it may take several months instead of weeks.
JVA hit $30 in July 2011 exactly the same time that coffee prices were the highest in 20 years. That is my premise here. Continued higher coffee prices will cause pressure on this stock to go higher.