Keurig Green Mountain, Inc. (GMCR) Falls Further; Bears Take Notice

Keurig Green Mountain Inc (GMCR) has been trending lower since November


Published on Mar 25, 2015 at 10:58 AM
Updated on Apr 20, 2015 at 5:32 PM

Keurig Green Mountain Inc (NASDAQ:GMCR) has been in a downtrend since touching an all-time high of $158.87 on Nov. 18, giving back roughly a quarter of its value. The disappointing trend is continuing today, with the shares off 2.9% at $120.36, and speculators are betting on more downside, picking up puts at a rapid-fire rate. The contracts are crossing at twice the normal intraday pace, and account for nine of GMCR's 10 most active options.

The contract garnering the most attention is the weekly 3/27 121-strike put. Data here suggests buy-to-open activity, with speculators looking to profit on a move further south of $121 by Friday's close, when the options cease trading. GMCR has fallen as low as $119.77 today.

Daily chart of GMCR since November 2014

It's usually calls that attract speculators in the stock's options pits. During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open nearly two calls for every put. The resultant call/put volume ratio comes in at 1.97, higher than 84% of all such readings from the past year.

Checking in on the Street, analysts have mixed feelings for Keurig Green Mountain Inc (NASDAQ:GMCR). Seven brokerage firms rate the shares a "buy" or better, with the other seven handing out "hold" or worse recommendations. What's more, GMCR could be in line for price-target cuts if it doesn't turn things around. The stock's consensus 12-month price target of $139.91 is a 16% premium to current levels

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