Starbucks (SBUX)

China sales are down, and China's a huge market for them. Seems to be no price point at which customers will not pay for a pumpkin spice chai latte. Has maintained its prestige. When he travels, he looks for the local Starbucks. Service is amazing. 

Generates high margins through the app. Growing revenues at close to 10% per year, next 2 years expects earnings to rise by 25%. Stock's weak, here's the opportunity, no one like them in the world. Yield is 2.4%.

Pressures include cash-strapped consumers in China; and some American shave been scared away from Starbucks off by pro-Palestinian protestors who don't realize that Starbucks has no real connection to Israel. IF SBUX's next numbers are weak, the street will conclude that the consumer is trading down from $5 coffee. Wait till their report, though. Is a great brand.

We don’t think negative shareholder equity is a big issue (only problematic for unprofitable companies that need to raise capital to survive). It is just an accounting quirk really as SBUX has repurchased shares aggressively in the past. The company’s operations appear to be out of track once every few years, as management focuses on short-term results instead of customer experience. The founder comes back to reorganize the business once in a while. Based on consensus estimates, sales are expected to grow by 8% over the next few years. Overall, we think SBUX is quite attractive here. Food and beverage overall is a tough industry to be successful in year after year, but given its strong brand name, and attractive valuation, we would be okay to add some here. It has strong international expansion plans and based on consensus estimates we think it could rise north of $100 in the next 12 months. 
Unlock Premium - Try 5i Free

Dutch Bros. grew way too fast. SBUX has a problem in China and the U.S. given the Israel-Hammas war. SBUX will miss its next report given weakness in China and the U.S. So buy SBUX $5 lower, because China is reawakening from its slumber and will come back.

Shares are down 2% in the past month. He expects them to blow their quarter, but that's not so bad (because you can buy on weakness). He still likes this name. Buy in tranches before and after that report, then see how it goes.

He bought it around $70 when China's stores were closed and sentiment was negative. The current CEO targets 5% same-store growth and 10% topline growth and 15% EPS growth, which is do-able. China continues to reopen after an unsuccessful start. Also, global markets will recover, like 4% store growth in North America (projected). Loves SBUX at 21x PE. He targets $120. Was upgraded today.

Struggling recently, mainly due to sluggish growth in China, which is its second-largest market. An opportunity to own the name. Likes the 15+% growth rate. International, global brand.

It has an 18 to 29% growth rate over the few years along with a 1.3 times PEG ratio. Growth is good especially in China.

#2 in restaurants. Shares have been down, but the price is attractive.

Rallied today and they plan to grow more in China, from 6,200 stores to 9,000 in 2025 vs. 16,000 in the US. Shares fall when US-China relations are rocky and rise when they are warm.

Trading at 200 day average - which makes good purchase price for long term investors.
Diverse retail footprint across the globe.
Revenues exceeding expectations.
39,000,000 members in digital loyalty membership base (USA).
Expecting major growth in China urbanization.
~2% dividend yield good for income. 

Outperforming. Bottomed last spring, not last October. Extremely well managed. Widely recognized brand. $36B expected revenue for this fiscal year. Beat revenue and earnings expectations. Stock drop of 9% yesterday is an opportunity. Expanding in US and China. Growing digital space. Yield is 2.02%.

They report Tuesday. He needs to hear from the CEO who has been quiet since taking it over--direction? plans?

Very strong business with entrenched brand.
Has owned shares for over 1 year.
As economy recovers from pandemic will increase profits.
Expecting long term success for the business.
Sees room for growth in China.

Will benefit from China's rebound, opening a new location there every 9 hours. Hugely popular there.