GMCR earnings release

Today, the long awaited Green Mountain Coffee Company reported their earnings. The first odd thing I noticed was the 3:48 ET trades, had set GMCR back about $2 per share. I sent out a Tweet stating that I wondered if anyone 'knew' something ahead of earnings since the activity seemed odd.

Sure enough, after the bell, the earnings report came out GMCR beat the bottom line, missed on revs and said it would meet or beat expectations for the next quarter. The stock initially dropped 8 points in the after market. It appears to have closed down 5 points for the night from the 4pm close. After viewing PEETs earnings report the night before, I was concerned this would happen, but didn't alter my positions because of the following reasons:

1. They have a Wal-Mart deal, PEET doesn't
2. The company would not have done a 3/2 stock split if they knew wouldn't have a great earnings report
3. I've seen GMCR in several stores, I've never seen PEET anywhere.

Looks like my analysis was very wrong. If I could have done it all over again, my thinking should have gone as follows:

1. Sell all my position in GMCR to lock in my earnings.
2. Buy small near the money call options with some of my earnings
3. Sit back and watch

If GMCR were to report good earnings and soar, I can eventually exercise the call options to get back into the stock OR if we got action like today, just enjoy the earnings I had already locked in and consider the call option purchase an insurance premium.

Of course, we never know what tomorrow could bring. A few weeks ago a company missed their numbers and opened down hard the next morning, but by the end of the day closed up.