Starbucks stocks still a safe investment?

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starbucks stocks

Hi guys,

 

Today we are going to take a look on Starbucks stocks. We are going to look at three things.

 

Number one:  Stock performance of Starbucks

 

Number two: How is the company doing in term of business

 

Number three: Speculation on Starbuck stock price

 

Starbucks stocks performance

Starbucks stocks price movement

Starbucks stocks price movement. Source: finance.yahoo.com

If you look at the chart, you will notice that the stock price movement has been really small in the last two weeks. Which means that the current trend of Starbucks stocks is sideway’s. It doesn’t really go up big or go down big.

 

So far this year Starbucks stock price hasn’t performed well compared to last year. But it didn’t performed worse as most of the oil companies. Since the stock split last year, the price value of the starbucks stock has increased with roughly 23,67% .

 

If you take  look again at the last two weeks performance of the starbucks stock price it seems that we are about to change the trend. Meaning that we might go up again. The volume of trading starbucks stock have dropped significantly. As you see, the lower the price go , the lesser investors are willing to sell their  stocks.

 

How is the company doing in term of business?

 

According to their last announcement on 11 August 2016, Starbuck is going to expand their distribution center with a extra of 1.2 million square feet. With this expansion, the distribution centre capacity will be increased with 35%! So this means that Starbucks is expecting that their business will grow more. Which is good news for investors like us.

 

So let’s take a look of how the business was doing in the third quarter. We see that sales in the US has increased with 4%, In China had has increased with 3% and in Europe there was a decrease of 1%.

The net revenue grew with 7% to a record of 5.2 billion dollars. And 474 new Starbucks stores were opened in this 3rd quarter.

starbucks stocks q3 results

source: investor.starbucks.com

So we can safely say  that the business of starbucks continued to grow. But it hasn’t grow as much as it did in the previous quarters. If you look at that chart. You will see that sales growth has been decreased. According to Howard Schultz , the CEO & chairman of Starbucks,  sales growth will back on his normal track of 5% or more soon. So how is this going  to reflect on the future stock price?

 

Speculation on Starbucks stocks price

 

When the third quarter results of starbucks was release, the stock price went down with 4%. And since then it kinda got stuck on that price level of 55 usd.

After the dividend pay out of Starbucks earlies in august, it seems that stock price is consolidating at a price range of 55 dollars and 56 dollars. If  this is so , then it means that the price range of 55-56 dollars will be the new support level for the starbucks share price. The only way to get this confirmed is to watch the stock price of Starbucks bounce off that price level a few times. If this going to happen then we may  see that the stock price of  starbucks will move into a bullish trend. And i believe that once the stock price close above the 60 dollars. That we will go into a strong bullish trend.

 

If you are looking for a long – term perspective. I think that the fundamentals of Starbucks stocks is solid and with stores expansion and adding new products such as recently gluten free products and Almond milk. I am confident that the Starbucks share price will eventually go to newer heights.

 

And one more thing… If you had bought the  100 Starbucks stocks  at ipo for a total investment of 1700 dollars in total. ( that was the introduction price). Then you would now own more Starbucks stocks because of the stock splits, that has happen a few times. But your current value would be around 300.000 dollars. As long as Howard Schultz remains CEO , then we all will be fine.

starbucks stocks split history

starbucks stocks split history

 

 

Source: investor.starbucks.com

 

Newsource: https://www.thestreet.com/story/13676975/2/almond-milk-other-non-dairy-products-could-stir-up-starbucks-profits.html

 

finviz.com

Current Starbucks stock price:




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