Endless Coffee Boom in Question: Caribou Insider Selling (CBOU, GMCR, SBUX, PEET)

Caribou Coffee Company, Inc. (NASDAQ: CBOU) is just one of the companies in the coffee system that has enjoyed great returns of late.  This retailer has chased the performance of Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) after the Starbucks Corporation (NASDAQ: SBUX) recovery.

So… What are investors to think when a top shareholder files to sell shares?  Simple, they think that the easy gains have already been seen.  Caribou shares closed at $17.05 on Friday and the 52-week trading range was $8.50 to $17.40.  Yep, no bear market victim there.

As of July 3, 2011, Caribou had 554 coffeehouses, including 147 franchised locations, located throughout 20 states, District of Columbia, and nine international markets.

Caribou Coffee announced that an offering of up to 5.15 million shares by a selling shareholder, Caribou Holding Company Limited under the affiliate of Arcapita Bank B.S.C., is going to sell the shares and it is also granting underwriters an overallotment option for up to 772,245 additional shares.  Investors know that ‘insider sales’ mean that none of the funds will head to the company.

There can really be no shock that Caribou shares are down over 8% at $15.64 today.  What is interesting is that Caribou is acting as a sector leader today rather than a second-tier outfit.  Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) is down 0.75% at $102.80, but Starbucks Corporation (NASDAQ: SBUX) is actually up with the market by 1.1% at $37.78.

Peet’s Coffee & Tea Inc. (NASDAQ: PEET) is another one of the last men standing after the coffee wars and its shares are down 1.1% at $56.63 today.

JON C. OGG