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Talk about piping hot, how about Diedrich Coffee Inc. (NASDAQ: DDRX)? The company's shares have been steaming higher for quite awhile now, and recently received an extra shot of potential buyers.
On June 26, the roaster and wholesaler of fine coffees was added to the small-cap Russell 2000 Index. Making it into the Russell 2000 means many indexed ETFs and mutual funds had to put DDRX shares in their portfolio.
But it's not just the inclusion of DDRX into the Russell 2000 that makes it worth pouring into your portfolio.
The stock is enjoying momentum, fueled by its decision to sell off its Gloria Jean's stores and focus instead on K-Cups, Diedrich's single-cup coffee packets that fit into Green Mountain Coffee's popular Keurig brewing system. With the increasing demand for specialty coffees in homes, restaurants, and offices, this is proving to be a smart strategy.
Last quarter, Diedrich reported earnings of 25 cents per share, versus a loss of 39 cents per share in the same quarter a year ago. I like that momentum.
I rate DDRX an A, or strong buy.
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