Coffee Holding Company (JVA)

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Saw coffee prices slipping back. But they should remain elevated for a long time. Maybe just me, but I would think the best thing for JVA is for coffee prices to consolidate just under $2 for awhile. Prices have seen a sharp rebound from the depressed levels of late last year. Should be great news for JVA in terms of revenue and hopefully profits. But I don't think we want coffee to skyrocket to $3, $4, $5 etc...as I think JVA may have trouble passing on such meteoric price increases to their customers. Although if coffee prices do soar like that, JVA could still see plenty of spikes higher.

I think the stock is a steal in the $6's. Worst case it drops to the $5's. That's where it was trading when coffee was at multi-year lows and the company was losing money. Earnings last quarter were solid even excluding the hedging gain. And that was with coffee at much lower prices. Poundage increased 13.7% last quarter. So now we're going to get the benefit of increased poundage AND significantly higher coffee prices. Plus they have some easy bottom line comps coming up. I think JVA could post some big EPS quarters vs. year ago losses. If that happens, who knows how high the momo players will take it!