Starbucks (SBUX)

This is more of a North American play. They are expanding in China but it is a much smaller percentage of their overall revenue base. Trades at a higher multiple than Yum! Brands (YUM-N), which gets over 40% revenue out of China. Also, has a stronger presence in Europe.

(Top Pick Feb 15/13, Up 5.94%) He was looking for a short term position and made some money.

He would like to buy this closer to the $52-$53 range. A global brand name with 18,000 locations. They are back into a growth type of mode at this time with retail stores. Also have the multi-channel distribution with the via PACs, ready brew pack, etc. Should benefit from consumer spending on discretionary goods including in China and India. Dividend yield of 1.46%.

Has plateaued. Is very fully valued at 30 times earnings.

Valuation is too high. Have been doing a great job. Too high a multiple. Prefers to pay less for companies. What is happening today is driving the value out of it.

High volatility, PE ratio. Positive support and momentum. Aggressive expansion plans. He will hold it for a couple of months. It broke out past its base.

Chart shows a little bit of basing with the neckline at around $54. Tested the neckline and then broke out and he feels it will get back to its old highs of about $62. Have a lot of expansion plans and are coming out with innovative products. Good growth stock. He will play this for the next few months and then get out.

(A Top Pick Feb 1/12. Up 14.75%.)

(Market Call Minute) Would like to buy a little cheaper.

A great company and have done very well. The difficulty he has is how much he is going to pay for this company. It has always been too expensive on a valuation basis.

Expensive. Disappointed last quarter and they got hurt. This happens when you have a high multiple company.

One of the things that has made this market tricky is that a number of key themes have continued to work (more or less, the yield themes) but the market has narrowed meaning fewer and fewer of these themes continue to work. One of these is the consumer discretionary theme. This stock has had a very strong move over the last couple of years and over the last few months has started to disappoint on the revenue and earnings sides. You want to give this theme more time.

Great company and continues to do very, very well but he feels it is expensive. Has come off the high. Certainly in the latter part of last year in the 1^st part of this year, were consumer discretionary stocks where the place to be, it was one of the better ones. Trading at around 35X earnings.

He has looked at it and likes it but for him it has been a case of valuation. They are becoming more attractive, great global expansion. Decent job in same store sales growth. Extremely well managed company. Doesn’t know if they will raise dividends soon.

For the 1st time in a couple of years, it has broken below the 200 day moving average which is not a good sign technically. Having issues with their European locations and started to shut down some of them. Long-term it is a good growth company but may be priced a little bit too high at 25X forward earnings.