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Released on Monday April 11, 2011, 9:30 AM ET
Pittsburgh, PA (SpeculatingStocks) - Caribou Coffee (CBOU) is a company that is in competition with Starbucks, but unlike Starbucks, Caribou Coffee has the bulk of its growth still to come. CBOU has made it through the tough start-up phase and their brand is now coming on strong.
SpeculatingStocks discovered CBOU in 2008 as a stock pick when it was trading at $2.76. CBOU is now trading at around $9.99.
Caribou Coffee has a great sustainable brand. We believe we could see it triple again from its current price. This stock’s potential is still being realized by investors.
CBOU will have its detractors who will think it won’t succeed, but CBOU is trading at a market cap of only around $204 million. This is cheap to invest in a brand like Caribou Coffee. Starbucks is worth over $27 billion. CBOU has so much market share to take!
Starbucks has close to 17,000 stores around the world and CBOU operates 534 stores, all in the US. There are significant markets for CBOU to enter.
For fiscal 2010, CBOU generated a profit of $9.40 million on revenue of $294 million. CBOU is cash flow positive and has over $23 million in cash on the balance sheet and zero long-term debt. We consider CBOU vastly undervalued right now and we should see the stock continue to trend higher and really spike as the economy turns around.
Caribou Coffee is well positioned to take advantage of an economic turnaround. They are doing well as is and will only do better. We believe younger coffee drinkers will relate to the Caribou Coffee brand more so than Starbucks in the long-term.
Caribou Coffee is a hip new coffee store brand and the stock could be even hipper to investors this year.
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