Louis Moore Bacon (Trades, Portfolio) is considered one of the top 100 traders of the 20th century. With an estimated net worth of around $1.7 billion, he is ranked by Forbes as one of the richest person in the world. He is the manager of a leading New York City-based hedge fund, Moore Capital Management.
Last quarter, Louis Moore Bacon initiated a position in Keurig Green Mountain (GMCR, Financial) by buying 28,200 shares. Louis is not alone in his bullish stance on the company. The company is also seeing insider buying, and the company's director Susan Kilsby and Norman Wesley bought 5,000 shares each on May 12, while another director Michael Mardy bought 1,000 shares on May 15.
GMCR is a leader in specialty coffee, coffeemakers, teas and other beverages in the United States and Canada. The company develops, produces and sells a variety of Keurig brewers, specialty coffee and other specialty beverages in portion packs, including hot apple cider, hot and iced teas, iced coffees, iced fruit brews, hot cocoa and other beverages for use with its Keurig hot brewing systems.
In addition to Keurig hot brewing systems, the company is also planning to introduce the Keurig Cold beverage system in 2015. Keurig Cold is an in-home cold beverage system that will use precisely formulated single-serve pods to dispense freshly-made cold beverages including carbonated drinks, enhanced waters, sports drinks and teas with the one-touch simplicity, quality and variety.
According to the company, its Keurig cold beverage system will meet a number of consumer needs:
- delivering the beverage cold versus ambient;
- offering a consistent and simple carbonation process at the touch of a button;
- enabling consistent and exact dosing of different levels of carbonation and flavoring; and
- offering wide brand choice and variety.
GMCR has seen tremendous growth in its topline and bottomline over the last 10 years. While the company’s topline has grown at a 10-year CAGR of 42%, its bottomline has increased by a CAGR of 56.70% during the same period. The following table shows the company’s revenue per share, earnings per share and other key metrics over the last three years.
Analysts seem to be positive about the company’s prospects and have a mean target price of $123.17 on the stock, which implies over 30% upside.
The company is trading at a forward PE of 21.61. According to Gurufocus DCF calculator, the company has business predictability rating of five stars and has a margin of safety of 11%.
I believe growth-oriented investors should consider buying GMCR at current levels.
