Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) has enjoyed a stellar run higher in 2009, with the shares up 105% year-to-date.
Today, the company announced that its board has approved a three-for-two stock split in the form of a stock dividend. All shareholders of record as of May 29 will receive one additional share of GMCR common stock for every two shares currently held, with distribution scheduled for June 8.
"This stock dividend allows us to share our success with our loyal stockholders to the extent of our authorized stock and underscores our confidence in the strength of our Company and its prospects for the future," said President and CEO Larry Blanford in a statement.
Investors are reacting positively to the news, with GMCR tapping an intraday peak of $82 on the heels of the report. The stock is currently riding high along the support of its 10-day moving average, which has collaborated with its 20-day counterpart to guide the shares higher since March 13. The security hasn't closed a single session below this double-barreled support in the intervening weeks.
Judging by the hefty amount of bearish bets still levied against this high-flying stock, its breakout rally has plenty of fuel left in the tank. Short interest represents a whopping 40.2% of GMCR's float, or roughly 6.5 times its average daily trading volume.
As you might imagine, these skeptics have been hitting the exits amid GMCR's uptrend. The number of shares sold short fell by nearly 19% during the past month, which translated to a fresh burst of buying pressure for the stock. As these shorts continue to cover their losing bets, look for this under-the-radar coffee issue to climb even higher.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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