Starbucks is one the company shares that I have in my own portfolio. I have bought the shares in 2014 for a price of 64 dollar per share. And then in April 2015 Starbucks did a stock split at a stock price of $95.23. So instead of having one Starbucks stock I have now two Starbucks shares. At the moment of writing this blog the Starbucks share has a current value of $52 dollar. So my return is pretty nice so far. My plan for the Starbucks shares is really simple: buy and hold. In this blog you will read my analysis that I have done before I started to invest in Starbucks shares.
Starbucks Shares Internal Analysis
The first thing that I do when I look for a company to invest in is to look at their history. Who are the founder(s) and are they still active in the company? Then I look at the management team and their skills on executing the companies plan.
You can judge the skill of the CEO and his management team by checking out the company quarterly results. A good CEO and a good management team has a quarterly results that often meets the expectations of analysts. A super good CEO and a super good management team often delivers quarterly results that surpass the expectations of the analysts and their shareholders. And my dear friend Starbucks has that super good CEO and a super good management team. For this year 2015 their first quarterly results and second quarterly results already surpass the expectations of most analysts.
When companies produce those kinds of results then you know your investment will be profitable for sure.
Starbucks Shares External Analysis
Your successful investment doesn’t rely only on the internal analysis of company but also on the external analysis. How does the company attain new customers and retaining them? How does the company perform compare to his competitors? How does the company deals with threats?
Let’s answer these questions.
- How does the company attain new customers and retaining them?
Starbucks gets most of their new customers by opening more stores worldwide. In the second quarter of 2015 Starbucks have opened 210 new stores worldwide. Another way of how Starbucks attracts new customer is by selling their products not only online but also in supermarkets.
- How does Starbucks retain their customers?
Starbucks offers good products that meet the needs of their customers and they also provide good services to their customers through their Barista’s. Believe it or not Starbucks even has membership offers for their customers. Their membership program My Starbucks Reward has been so successful that in the second quarter 2015 1.3 million new members have signed up!
Starbucks now has over 10 million members in their membership program. Can you imagine a membership for coffee? Well Starbucks have pulled that off and not only that more members are signing up everyday.
- How does the company perform compared to his competitors?
Starbucks is beating their competitors; almost in every market Starbuck is the market leader.
- How do Starbucks deals with threats?
In my opinion Starbucks have been dealing with threats quite well I believe. For example last year in 2014, there was a commotion that Starbucks coffee was more expensive in China then in the US. The Chinese consumers were not happy about that and some of them threaten to boycott Starbucks. As a result of that commotion Starbucks shares began to drop in price at the stock market. Just in a few days Starbucks fixed the commotion by showing the Chinese consumers that the cost price for Starbucks was a lot higher in China then in the US. And so price of the Starbucks shares went up again
As long Starbucks keeps doing well in my analysis then there is no reason for me to sell the Starbucks shares only to buy more. For short term there a good possibilities to make money from Starbucks as there will be always fluctuations. Make sure to benefit from those fluctuations