Mai 31

Ugg imitate

Here’s a look at seven retail stocks that may catch the eye of companies hunting for acquisitions in the near future:Specialty coffee maker Green Mountain Coffee Roasters (NASDAQ:GMCR)has taken off on the strength of its Keurig Single-Cup Brewing System, an innovation that has become wildly popular due to its convenience in both at-home and away-from-home settings. GMCR acquired Keurig and its patented system for $104.3 million in 2006, and has seen its revenues jump from $225 million in the 2006 fiscal year to $1.357 billion in the 2010 fiscal year, with sales on pace to almost double that figure this year. According to the company’s recent third-quarter earnings report, sales of the Keurig system and its refill portion packs (“K-Cups”) accounted for around 82% of GMCR’s consolidated net sales this past quarter.

Since last year, GMCR has signed licensing deals to sell coffee refills under major U.S. coffee brands such as Smucker’s Folgers (NYSE:SJM), Starbucks (NASDAQ:SBUX) and Dunkin‘ Brands Group’s Dunkin‘ Donuts (NASDAQ:DNKN). It wouldn’t be surprising if any of those three made a push to absorb the single-cup technology into its business structure via a buy-out.

Starbucks (SBUX) in particular would stand to benefit from control of the K-Cups as a supplement to its current share of the premium single-cup category, Starbucks Via Ready Brew, given the company’s aspirations of future growth in that area. The more Starbucks can deflect the impact of the potential shift in market share out of cafes and stores and into the home, the better chance it has to limit the effect of that shift on the revenues of its pervasive shop locations. With $1.45 billion in cash reported on its 2010 balance sheet (and a total market cap of $27.9 billion), Starbucks would probably have to issue additional equity in addition to debt to swallow GMCR’s market cap of $15 billion, but the coffee giant may see it as a necessary risk to try to stem the receding returns on its retail stores.

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