Starbucks (SBUX)

Chart's all over the place. 200-day MA has been flat, turning up a bit last couple of months. Good that price has moved above 200-day. No great Buy signal at this point. 

He's fairly careful on discretionary names today. High price of oil will hurt consumers. Plus, lots of international competition from smaller names.

What could hurt them is the inability to close underperforming stores and devote that money to the performers. Also, SBUX needs to get more into Middle America which will take time.

Today they reported a gigantic upside surprise in same-store sales under the new CEO, up 4%. It's turning around by improving customer service and reducing employee turnover.

It reports Wednesday and an analyst investor day on Thursday. Unless the numbers are insanely strong, the stock can't keep climbing in this recent rally. It's overbought.

Took a big hit last summer with closing stores and layoffs. However, hiring more baristas per location to try to improve operations and efficiencies in speed and service. Right thing to do long term, but sets earnings estimates lower for the next couple of years. Premium brand. Likes new CEO with plans to return to the beloved SBUX of old.

Still likes for long term. Adding in $80s.

The union is escalating its strike; not a great headline. She added more this week and would buy even more on this news is shares fall further. They will resolve the strike eventually. The turnaround is just beginning. They saw the first positive same-store sales comp in two years. Are doing well in China.

New CEO has some pretty sensible plans to get them back to basics. Needs to simplify menu and wait times. Evidence that US business is starting to stabilize, as seen in previous quarter. Fix won't be overnight. Wonderful position in terms of market share. Yield is 2.86%.

It seems to be turning itself around, but the value created isn't there, not yet.

Can't deny that the CEO has pedigree. Question is whether he can apply that success to the SBUX model. Bringing him in is akin to a Hail Mary. Turnarounds are hard. Serious issues, and one is that China is a very big component of their story and their growth story. Worries him that it's using debt to finance stock buybacks.

Revenue topped, but same-store sales fell short and earnings were soft, though due to a tax charge. Just reported. He considers the overall report good. The CEO is doing a fine turnaround which is why he's holding onto his shares. North America and China same-store sales beat, but was flat internationally. True, numbers have been choppy in recent quarters. In-store sales experience is improving with faster transaction times in the US, their core business and core market. Their long-term turnaround plan is ahead of schedule.

It reports Tuesday. He hopes the CEO announces his plans for China and in improving throughput.

Like Dutch a lot and the stock has moved up a lot, but SBUX has a CEO that turned around Chipotle.

Price today is back where it was in 2019, with a very broad sideways motion and trading range since then. The move from $116 to $76 this year was a huge drop, it really fell apart. Has recovered a bit, but volume is drying up. On any rally, you want to see some good volume. Resistance around $100, so if it breaks above that then it's in a new upward trend. Look elsewhere for now.

Stock price has done a complete round trip over the past year. Big excitement of new CEO and new initiatives. Incurred costs up front, and these things take time, but he thinks these initiatives will gain traction over the next year or two. 

200-day MA is moving up a bit, which is positive. However, the price fell below that 200-day in April (as did a lot of stocks). About 30% below March highs. Always commands a premium valuation due to brand. Fallen below 200-week MA. Paying 30x forward PE, but only 8-9% earnings growth for next 3 years. 

Recovery's been slow. Depends on consumer, especially in China. Long term, great name. Wait for better opportunity.