A Freshly Brewed Pot of 5 Coffee Stocks

• «
• »

Caribou Coffee Company

Caribou Coffee Company, Inc. (CBOU) is perhaps the least well known of the coffee stocks, but that shouldn't deter you from taking a sip from their cup. The Minneapolis, Minnesota-based company operates 515 gourmet coffeehouses and sells gourmet coffee and specialty teas to club stores, grocery stores, mass merchandisers, office coffee providers, airlines, hotels, sports and entertainment venues, college campuses and online customers.

Seeing stagnation in the business of operating coffeehouses, Caribou is now focused on moving away from side of the business and toward becoming a premier premium branded coffee company.

The company's earnings are reflecting the change. On August 4, Caribou announced earnings per share of 6 cents, which was 6 cents better than what analysts expected (yes, you read that right). This was Caribou's third quarter of positive earnings. And although the company's total sales were down (mostly because coffeehouse sales were down), Caribou did open 8 franchise units, and commercial sales were up 28%.

I like Caribou's strategy of focusing on the commerical market. I rate CBOU an A or strong buy.

Next: Diedrich Coffee Inc.