Starbucks (SBUX)

One of the best performers in the S&P 500 going back 20 years. Thinks it has never had less than a 22 PE multiple, but has typically been in the 26 to 30 range. The valuation has always been a reason for people to not own the name. The real big growth area for them is their acquisition of Teavana in China. The 2^nd area, that nobody is giving credit to, is that they own about 15 or 16 standalone consumer goods. There are still good days ahead of them.

It is not doing what he wants it to do before he buys is back. He looks for breakouts. It is making lower highs. It is consolidating at best. He would want to see it break out. It is in limbo.

A classic growth stock that has had some hiccups. He would not be a buyer here. One of those consumer discretionary names where people have hypothesized that they wouldn’t be spending $5, but would go someplace else for a lesser price. If you can get this in the mid-$40 you’ll be doing yourself a great deal.

It has slowly faded lower since its peak earlier in the year. Long term she loves this stock. They have a reliable store front. They are rolling it out globally.

(A Top Pick Aug 31/15. Up 0.39%.) Has been a core position for years. It is a long-term powerhouse, and every once in a while it has to have a rest, and this is a year for that. This is still a Buy.

Had looked for his worst performing names this year, and this was one of them. It has had 24 out of 25 quarters of phenomenal results, growing every single year. A lot of people are stopped from going into this because it has a 30 P/E ratio. Around 2010 they were doing something like $3 billion a quarter in sales, and their P/E ratio 30, and now they do $11 billion in the ratio is still 30. Dividend yield of 1.46%.

A great business that is an iconic consumer brand. Has a lot of attributes that he looks for. The issue for him has been valuation. When they disappoint, even modestly on comp, the bar is so high that you have to consistently be above the bar, or otherwise you are likely to de-rate. There will be a point where he will be interested, but not today. He will watch, and at the right time will own it.

Had always thought this was too expensive. It trades in the high 20s in terms of a multiple on earnings, and wonders what happens if they hit a bump on the road. A 27 multiple can turn into a 15 easily. He also has a bit of difficulty with the model. Mall traffic is down. People are not out and about as much. There is more online shopping. As time goes on, he feels they are going to struggle to get the type of traffic that they have had in many of their locations.

Likes it quite a bit. The largest coffee retailer in the world. 4% US same store sales. It is down from a long term 5%. They need to return to that 5% for the stock to return in the back half of the year. 20+% dividend growth is his expectation. China should be bigger than the US some day.

(Market Call Minute.) A lot of people are not convinced that their competitor at Restaurant Brands (QSR-T) is making the right step in moving to the UK.

(Market Call Minute.)

On a 3-year chart, there has been a general disintegration of the upward trend after moving up through most of 2014 and 2015. We are now getting a series of lower highs and lower lows. He would be a little cautious on this.

Hasn’t done all that well recently. Thinks it is going through a classic growth story that is maturing a little. It has been one of the greatest retailing franchises in history. It has also had a very high valuation. Expensive right now at 25-26 times earnings. Has a large bet on China which he thinks will pay off for them. It’s a name that, at the right price, he would be a buyer.

This has been a strong performer for so long. She gets the impression that they have their initiatives and that they are acting with a sense of urgency, as if they were a much smaller company. Has always stayed away from the name just on valuation. They integrate a lot of technology.

(Market Call Minute.) There are a lot of issues going on with this company, so this would be a Hold and you should look at other things.