John Thaler's JAT Capital Boosts Green Mountain Coffee Roasters (GMCR) Stake ~ market folly

Friday, December 17, 2010

John Thaler's JAT Capital Boosts Green Mountain Coffee Roasters (GMCR) Stake

John Thaler's hedge fund JAT Capital just filed a 13G with the SEC regarding Green Mountain Coffee Roasters (GMCR) due to portfolio activity on December 6th. JAT disclosed a 5% ownership stake in GMCR with 6,602,008 shares. This is an increase of 128% in their position size as they held 2,890,042 shares at the end of the third quarter. Drilling down the specifics of JAT's current position, the hedge fund firm owns 4,102,008 common shares and then their additional 2,500,000 shares are represented by call options.

Green Mountain Coffee Roasters is an interesting stock because it is essentially a 'battleground' of hedge fund opinion. This name has high short interest but at the same time, some notable funds hold long positions. At the end of the third quarter, some of the big holders were JAT Capital, Stephen Mandel's Lone Pine Capital, Patrick McCormack's Tiger Consumer, Brett Barakett's Tremblant Capital and Steven Cohen's SAC Capital.

Prior to founding JAT Capital, John Thaler worked at Shumway Capital Partners where he covered telecom, media and technology and then managed the internal Omni fund. Thaler earned his BA in Economics at the University of Chicago. JAT employs a long/short equity strategy with an emphasis on proprietary fundamental research. In 2008, the fund returned -5.9% compared to an S&P return of -37%. JAT finished 2009 up 23.2% gross. Thaler brings a private equity-like approach to investing due to his days at Spectrum Equity Investors, a private equity firm focused on technology.

Per Google Finance, Green Mountain Coffee Roasters is "engaged in the specialty coffee and coffee maker businesses. The Company operates in two business segments: the Specialty Coffee business unit (SCBU) and the Keurig business unit (Keurig). SCBU sources, produces and sells more than 200 varieties of coffee, cocoa, teas and other beverages in K-Cup portion packs and coffee in more traditional packaging, including whole bean and ground coffee selections in bags and ground coffee in fractional packs, for use both at-home (AH) and away-from-home (AFH)."

Scroll through the latest hedge fund activity here.

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