Keurig signs a new deal with Coca-Cola

The single-cup coffee company saw its shares rise on the deal. Is it a buy?

By Motley Fool Investor Beat May 13, 2014 4:25PM
Keurig Green Mountain (GMCR) saw its shares jump big Tuesday after Coca-Cola (KO)announced it would increase its stake in the at-home coffee brewer.

Back in February, the beverage giant had agreed to a deal that gave it a 10 percent stake in Keurig, with the opportunity to increase that amount to 16 percent. Tuesday, Coke announced that it would take that deal.

In today's "Stock of the Day," Motley Fool analyst Jason Moser says this is a great announcement for Keurig since it's coming at a pivotal time for the company. Caption: A K-Cup by Green Mountain Coffee Roasters
Credit: © Toby Talbot/AP

Once upon a time Keurig was just a coffee machine, but it's created a lot of new relationships recently with companies like Coke and Campbell Soup that have validated its business. On top of that, Coke's stake in Keurig indicates that it has a lot of faith in the future of the at-home beverage market, a niche market that Keurig is poised to take a large chunk of.

So, should investors consider buying today after Keurig's jump? Jason doesn't like the idea of buying after a 10% pop, but he does love the company's many deals and its razor & blade business model. At the end of the day he thinks it's an impressive company with a lot of potential and it should stay at the top of an investor's watchlist.

The Motley Fool's 12 top stocks for 2014 are now available! So if you're tired of picking stocks out of a hat and hoping that one skyrockets, check out Stocks 2014: The Investor's Guide to the Year Ahead. It's The Motley Fool's current top report, and includes Chief Investment Officer Andy Cross's top stock for 2014! This under-the-radar company is the secret winner in the war for the last precious drops of oil on the planet. Find out what it is and how you can take advantage of this unseen company's huge profits in this special, free report, just click here now.

Why do they choose Newark NJ? It like south side of Chicago. It will never work on any funding or condition.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
262 rated 2
480 rated 3
651 rated 4
649 rated 5
629 rated 6
616 rated 7
496 rated 8
346 rated 9
111 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.