Happy National Coffee Day! (Unless You Own Coffee Stocks)

It would seem the stock markets were a bit over-caffeinated today, with wild swings in both directions (what else is new?). There is no doubt hyper-stimulation, palpitations and irritability were the order of the day for most traders.

But on National Coffee Day we were curious how some of the major coffee-related brands made out.

But before that, just a touch of coffee trivia:

• Over 400 billion cups consumed daily
  
• Arguably world's favorite beverage after water
  
• Reportedly first discovered in 9th century Ethiopia when a goat-herder noticed his charges were stimulated by munching on coffee beans; refined as roasted beverage in Arabia in either 15th or 16th century
  
• World's 7th largest agricultural export and backbone of many South American and African economies

And most importantly, free coffee today at many participating Krispy Kreme's.

But not a great day for coffee overall, as coffee futures were off 1.0%.

But the major "corporate" parent companies did ok, with Nestle, Kraft, and Smucker's (Folger's) all up modestly on the day.

But some other coffee brands did not fare so well, with GMCR (Green Mtn.) off -7.2%, Dunkin Brands (DNKN) off -2.4%, and Starbucks (SBUX) off -3.2%. All three were even lower before the late day bounce in the market.

Why the poor performance? Really would seem the common thread is the high-beta nature of the names and then specifically some negative comments by a few analysts recently on whether rising costs will hurt margins and if growth estimates have become overblown for the industry. (In fact, coffee futures nearly doubled in a year but recently have come off hard along with other commodities).

In any event, I am off to find the nearest Krispy Kreme before it gets too late.

Good Trading!
David W. (aka The Underground Trader)

 

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