Green Mountain Coffee Roasters Inc. (GMCR), Monster Beverage Corp (MNST) Among Today’s Key Analyst Decisions

Trailing-12-month FCF at the company comes to $367 million, which is only 91% of reported earnings. So if Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) looks pricey when valued on GAAP earnings, it’s even more expensive when valued on its real cash profits. Long story short, the stock looks overvalued to me. I wouldn’t buy it — and certainly not after today’s run-up.

Can TiVo be saved?
Finally, we come to one of the (very few, apparently) companies that did not report earnings today but got a new buy rating from Wall Street anyway: TiVo Inc. (NASDAQ:TIVO). This morning, MKM Partners initiated coverage of TiVo Inc. (NASDAQ:TIVO) with a buy rating and an $18 price target. And here’s the astounding part: They might be right.

Unprofitable today — and really, unprofitable most years — TiVo Inc. (NASDAQ:TIVO) doesn’t look like much of a business at first glance. But the company generated $41 million in positive free cash flow last year, and $234 million the year before that. Profits are kind of hit-or-miss for this company, which relies on lawyers extracting license fees for much of its business, but MKM thinks the company will see more success on this front, and could be due as much as $8 to $15 per share in litigation settlements in relatively short order.

For a company that’s already sitting on $455 million net cash, this raises the potential for TiVo Inc. (NASDAQ:TIVO) to soon have more cash in the bank than Mr. Market currently charges to buy the whole business on the Nasdaq. And while success in court is never guaranteed, TiVo Inc. (NASDAQ:TIVO)’s continued positive free cash flow, and fairly low valuation relative to that FCF, makes the stock look like it could be worth a (small) gamble.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters and Monster Beverage. The Motley Fool owns shares of Monster Beverage.

The article Thursday’s Top Upgrades (and Downgrades) originally appeared on Fool.com and is written by Rich Smith.

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