Starbucks (SBUX) is the world's leading roaster and retailer of specialty coffee. Through its global network of owned and franchised coffee retail outlets, Starbucks offers a wide range of products from coffees and teas to sandwiches and brewing equipment. It competes with McDonald's (MCD), Caribou Coffee (CBOU) and Peet's Coffee (PEET) in the broader market for specialty coffee.

The market for single cup roasters is estimated at $4 billion, according to Reuters. Single cup coffee roasters are growing in popularity, especially in business offices and waiting rooms. Naturally, coffee roasters like Green Mountain Coffee (GMCR) and Starbucks (SBUX) want a piece of the action.

The single cup roasters provide several advantages to having coffee in larger coffee pots. For one thing, coffee which sits for hours in a pot loses some of its fresh flavor or becomes bitter. Enter the single cup roaster. You simply pop a small container of coffee in the machine, and viola, you get a single cup of coffee with little or no mess, and always fresh.

Green Mountain Coffee Roasters (GMCR) has taken a drastic dive, with the stock staging a bearish gap with the sound of Friday's opening bell. Thursday night, the company unveiled its fiscal fourth-quarter results, and also confessed to a disappointing outlook for the first quarter.

Specifically, Green Mountain said it banked a fourth-quarter profit of $27 million, or 20 cents per share, up from its year-ago earnings of $14.1 million, or 12 cents per share. Sales for the quarter climbed 73% to $373.1 million. The results fell roughly in line with Wall Street's expectations, which called for a profit of 20 cents per share on revenue of $359.2 million.

Analyst Upgrades

• SanDisk (SNDK) was upgraded to outperform from neutral at RW Baird.
• JPMorgan resumed Potash (POT) at overweight, up from neutral.
• Ariba (ARBA) was upgraded to buy from neutral at Roth Capital.
• Cirrus Logic (CRUS) was upgraded to buy from hold at Jefferies.
• Morgan Stanley upgraded Tesoro (TSO) to overweight from equal weight.
• Solarfun Power (SOLF) was upgraded to buy from hold at Auriga.
• Barclays upgraded Ciena (CIEN) to overweight from equal weight.
• Optimer Pharm (OPTR) was upgraded to outperform from market perform at JMP Securities.
• Argo Group (AGII) was upgraded to outperform from market perform at FBR Capital.
• BofA/Merrill upgraded Green Mountain (GMCR) to buy from underperform and Southern Company (SO) to neutral from underperform.

Investors that have a time horizon longer than a couple of days are likely finding this market to be extremely difficult. The indices have been stuck in a range for months between around 1,040 and 1,130 on the S&P 500. The economic reports have been mixed and have offered very little visibility into what the future may hold. Volume has been extremely anemic in the stock market, which has contributed to the overall impression that no one has much conviction in the direction of equity prices.

While risky, it is times like these that investors may just be better off finding some high beta names that are exhibiting sustained relative strength in an effort to end the year in positive territory.

"Green Mountain Coffee (GMCR) has a classic razor and razor blade business; it is involved in a true mass market that the firm is penetrating rapidly, and if management makes the right moves, it could go far," says Mike Cintolo.

The editor of Cabot Top Ten Weekly explains, "The razor part of the story is Green Mountain's Keurig single-serve brewers, which offer consumers a quality cup of coffee at a price far cheaper than picking one up at Starbucks.

"The company offers great variety (there are dozens of coffees, teas and cocoas to choose from, including newer iced teas and iced coffees) and convenience.

Green Mountain Coffee Roasters (GMCR) has rebounded from a recent pullback, but one options trader is looking for the stock to slump during the intermediate term. On Thursday, one bearish bettor opted to build a synthetic short options spread on the equity.

Specifically, the trader sold to open 2,500 contracts of GMCR's near-the-money December 25 call, and simultaneously purchased an equal number of December 25 puts. This pessimistically skewed strategy closely resembles the risk/reward scenario of a traditional short sale: If GMCR should slump below $25 prior to December expiration, the trader stands to collect a healthy profit. On the other hand, if the stock rallies significantly north of this strike, losses could add up quickly.

As the name suggests, Green Mountain Coffee Roasters (GMCR) is based in the pastoral state of Vermont. The company offers about 180 varieties of coffee, cocoa and tea, which it sells to wholesale customers including supermarkets, convenience stores, resorts and office-delivery services.

Some of its biggest customers are ExxonMobil's (XOM) convenience stores and McDonald's (MCD) restaurants. In September, Green Mountain acquired Tully's Coffee, which has been chipping away at Starbucks' (SBUX) dominance in the Pacific Northwest. Green Mountain Coffee's popular Keurig brewing system is also red-hot, with the increasing demand for specialty coffees in homes, restaurants and offices.