I put together a scratch valuation on Green Mountain Coffee Roasters (GMCR). Even with fairly aggressive assumptions, particularly the operating margin expansion, the stock valuation seems rather strained at the $80+ level. This does not factor in the pending acquisition of Diedrich (DDRX), so the cash on balance sheet that will be used to finance that purchase is added to the equity value.
Used the company estimates provided in the 4Q Earnings PR from November as the 2010 fiscal base line.
GMCR Scrap Valuation
Monday, January 4, 2010
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