Manning & Napier Advisors (Trades, Portfolio) was founded in April 1970 by Bill Manning and Bill Napier. The firm has absolute return orientation and believes that a focus on price can help investors avoid permanent loss of capital. The firm’s investment approach is aimed at maximizing absolute returns over the long-term.
Last quarter, Manning and Napier doubled its stake in Keurig Green Mountain (GMCR, Financial) by buying 166,350 shares. The firm was holding 321,720 shares of the company as of June 30, 2015. The following chart shows Manning and Napier's holding history in GMCR.
Manning and Napier is not alone in its bullish stance on the company. The company is also seeing insider buying, and five different insiders have purchased the company's shares in the last quarter. While the company's director Susan Kilsby and Norman Wesley bought 5,000 shares each on May 12, Michael Mardy bought 1,000 shares on May 15. Another director Reyes Jose Octavio bought 15,000 shares of the company on May 19 and Robert Allen Steele bought 2,500 shares of the company on May 20.
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 $110 on the stock, which implies over 57% upside.
The company is trading at a forward PE of 17x. According to Gurufocus DCF calculator, the company has business predictability rating of five stars and has a margin of safety of 32%.
I believe investors should consider buying GMCR at current levels.
