Starbucks (SBUX)

Thinks the upside a year from now will be about 15%-20%. He continues to like the company, but the biggest knock on it is that it is expensive. The multiple is warranted by growth going forward. There are a couple of things that is going to drive the share price higher. There will be an increase in emerging market penetration. North America accounts for well over 75% of their sales, and as they start to open stores in other parts of the world, that will have a very significant impact on their earnings and long-term growth expectations. Dividend of 1.2%.

If you really, really want to own this, take a little bit. Buy it so that you are in the game. Very expensive, and a market correction might help in getting an investor a core position. On his radar list.

(A Top Pick May 12/14. Up 44.16%.) Any time you are buying this, it is trading at a premium multiple, but a premium growth story. At the time he recommended this, the growth was more than justified. Has become more expensive and he has pared back his position.

As a value-based investor, she finds a valuation on this to be quite high. If she were going to buy it, it would have to be on a pullback. The company is doing quite well. The introduction of food has helped. Grows internationally and still has a lot of runway.

(Top Pick Apr 16/14, Up 43.83%) It is a core position. They keep doing everything right. They are innovative and have the International expansions going. He has not sold any. He would not be chasing it here because it is so rich. Let it come to you. Be patient.

This is a growth stock with a growth multiple attached to it. They started to roll out a facility for ordering online. She looks for value so this one doesn’t interest her.

The consumer has been 8-9 months of putting those dollars into their pocket that they saved on gasoline. A lot of the money has been saved, not necessarily spent. Because of this, he feels this company has a big tailwind in the market and lots of opportunity for adding to their business.

Disney (DIS-N) or Starbucks (SBUX-Q)? Dissimilar companies. Doesn’t own either, but if he were, it would probably be Disney, because he likes the long-term prospects for entertainment.

He likes this. Have done an excellent job of expanding. Now over 21,000 stores in 66 countries. For the established stores, they are continuing to innovate, which is helping. Growth is really coming out of Asia where there have been 750 stores opened. Numbers are showing 20% growth year-over-year in Asia, compared to 10% in the US. This is a pure momentum growth story, and if you believe that is going to continue, this is the time to buy it. He would like to see a 10% pullback before he gets into it. Dividend is only 1.25%, so you are not getting paid a whole lot to wait.

A really good company and has done extremely well over the long-term. Continues to grow its revenues and earnings and build shareholder value. He finds it a little bit expensive at this price.

Feels the consumer is getting stronger and will spend money on things that make them feel good. This company has a very unique customer base and one that they are growing nicely. Same-store sales were up 5% in the US recently. Traffic growth was 2% giving 17% in traffic. Operating margins were up 12%. A great company to begin with, but they are adding new revenues per store by adding more food. Demand side is strong, new product offerings are strong and the cost of coffee is down 35% last year and is probably heading lower.

(A Top Pick Feb 13/14. Up 27.03%.) A premier name that demands a premier valuation. They are expanding their food and beverage offerings. More of a breakfast type of food in the mornings. Improving labour market and lower fuel costs benefits a company like this. Trading at 27X forward earnings, but is still growing at 15%-20% EPS long-term growth.

They have done very well execution wise. They are going into different lunches and offerings. A good story, but on the valuation front she just isn’t interested.

Wait for a pullback to buy it. They did a great job of turning around the company. It is a great brand and well known.

(A Top Pick Feb 6/14. Up 23.46%.) When he chose this, it had seemed like it had been unloved for a little while and had moved sideways. They continue to do a fantastic job and they are seeing a seismic shift in their business to mobile and 7 million new loyalty cardholders that they can convert and monetize and work closely with. Global expansion is huge. Recent earnings that came out were phenomenal.