Piping Hot: Coffee Stocks Holding Up Well

The market has been in correction for the past six weeks, yet the coffee stocks have been holding up well, indicating that once the market is done correcting, these names should become market leaders. Names like Peet's Coffee & Tea, Inc.

, Starbucks Corporation

, Green Mountain Coffee Roasters Inc.

have held up relatively well. The real stalwart of the group is a little tiny $80 million microcap company known as Coffee Holding Co., Inc.

. Even our neighbor to the North, Canada, has one of its own names in this space that has performed well, Tim Hortons

. Coffee Holding has been powering higher this entire month after the company reported strong earnings. The company reported earnings of 22 cents per share on $37.3 million in revenues, which was a rise of 87% year-over-year in revenues. When the company reported earnings on June 9, shares jumped 45% that day. Since the end of May, shares have gained nearly 90%, as investors are rewarding the company for a strong earnings report. Peet's appears to be breaking out this morning, further fueling the trend that these names will lead once the market has resumed its uptrend. it will be interesting to see if the breakout holds, or if it fails. In addition to the company specific outlook, the macro outlook for the coffee names has improved as well. Coffee prices, while still elevated, have come down, and there is renewed interest in the space. Dunkin' Brands is set to go

and earlier this year, Starbucks and Green Mountain announced a

that would put Starbucks K-cups into Green Mountain's Keurig machines. In Dunkin' Brands prospectus, it says, "We believe there is a significant opportunity to grow our points of distribution for Dunkin' Donuts in the U.S. given the strong potential outside of the Northeast region to increase our per-capita penetration to levels closer to those in our core markets." These names have been holding up well, and Coffee Holding has been soaring since the earnings report. If investors want some piping hot gains, consider looking at these names. The best part of waking up is not Folgers in your cup, it's growth in your portfolio.