Keurig Green Mountain And Its Operations

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After reviewing the financial and performance information related to Keurig Green Mountain and its operations, I would recommend holding the Keurig Green Mountain stock. Keurig has a high degree of leverage and has the ability to take on more debt to finance its expansion of operations. As Keurig Green Mountain navigates managing strong sales in current markets and expanding into untapped markets, it will also have to manage criticism about sustainability and face legal consequences stemming from product recalls. Balancing the strong growth potential with challenging strategic issues will help determine Keurig’s unpredictable stock price.
Founded in 1981 in Waitsfield, Vermont, Green Mountain Coffee Roasters invested in Keurig,
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The lawsuits against Keurig are detrimental for its image and also represent the possibility of lost earnings from more recalls and future settlements.
In February 2015, Keurig announced a contractual stock repurchase plan. Keurig Green Mountain reached an agreement to repurchase over 5 million shares of Keurig’s common stock from Luigi Lavazza at a price of $119.18 per share. (The purchase price represents a 3.0% discount off the closing price of Keurig common stock on February 20, 2015). This repurchase will be financed through Keurig’s cash reserves and existing credit. Stock repurchase programs are often used by companies as an efficient use of excess cash. Stock buyback programs are often regarded as signal that shares are undervalued and are expected to rise in the future.
In March of 2015, Keurig acquired DS Services. Through the acquisition of DS Services, Keurig will now be able to offer a new brand of beverages – Javarama. Keurig’s deal with DS Services will allow Keurig to manufacture Javarama and other gourmet roasts through the exclusive K-Cup platform. This acquisition shows Keurig’s commitment to providing its customers with new, desirable products. Keurig Green Mountain is a leader in the industry it operates in.
Keurig Green Mountain has experienced steady growth in
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