Recent News
Environmental groups have an impact on KKR buyout of TXU Corp - aka Texas Utilities (TXU). They managed to force the company to reduce the total number of coal plants being planned in Texas from eleven to three. Article at Business Week Online. Rain Forest Action Network on "What Happens Next" The Daily Grist calls it "Texas Fold 'em"
|
Home 
Neubert's Trades Playing Year End Tax Selling: Buying Starbucks
Neubert's Trades Playing Year End Tax Selling: Buying Starbucks
| Playing Year End Tax Selling: Buying Starbucks |
| Written by David Neubert | |||
 Starbucks came up on my year-end tax selling screen, so I decided to take a look at its valuation. Everyone loves to hate Starbucks (SBUX - $21.20). The stock as been on a one-way ticket to hell, falling nearly 50% from its highs created by what I term the "Starbucks Bubble." In my experience, when stocks go down like this (deflating a bubble) the stopping point tends to be a 50% drop. But that is not why I chose to buy the stock here. I bought Starbucks today because it represents value at only 19 times next year's earnings. The stock also gains from the deflated dollar, as its earnings overseas are increasing. Disclosure: I own Starbucks (SBUX). My last trade in Starbucks was a sale at a split adjusted price of $30 a share back in Jan of 2005 (yes, I missed the bubble). I may buy more Starbucks and buy or sell options on Starbucks in the next few weeks. I almost never drink Starbucks coffee unless I am on the road.  Greenwich Village (where I live) has too many quality alternatives where the owner of the cafe will be frothing my latte; my favorite is Grounded on Jane Street. The Berkshires, the location of my second home, is another place with lots of alternatives and few Starbucks stores. That leaves travel and road trips for Starbucks consumption. And heck, I like it. I like their sandwiches and I like that they try to make fair trade cool. I could criticize some corporate behavior but, relative to most, they are great in terms of benefits, fair trade and store ambiance. Site Disclaimer Starbucks Greenwich, Connecticut photo by David Neubert via Flickr Owner of Grounded, Jen Greenberg, Frothing My Latte photo by David Neubert via Flickr
|
Latest Postings
- Energy Stocks Got a Boost Monday
- 12 Interesting Things I Learned at The Feast
- In a Warming World Coastal Forests Are the Only Defense
- FDA Approvals and What They Mean to You
- What Happens to the Stock Market if Obama Becomes the CEO of America?
- Global Bailouts Will Lead to Global Inflation: How to Play It
- Global Bailouts Will Lead to Global Inflation: How to Play It
- Exxon Mobil (XOM) Works On Its Eco Image
- Bush's Final Legacy: Stealth Tort Reform
- Amendment 58 in Colorado Seeks to End Subsidies for Big Oil
- Have the Numbers Gotten Too Big to Understand?
- Why Paulson Can't Clean Up the Pollution on Wall Street
- Will the Real David Icke Please Sit Down
- Beyond Growth: The Wealth of Community
- Big Oil Falls with the Stock Market
- The Rebirth of the System: From Caterpillar to Butterfly
- Pain Relief Without Addiction
- Why I Like Obama on Energy
- The Feast: Social Innovation Conference
- Vaccination Side Effects, Sponsored by Merck
- We Won!!!
- Reframe It: Reading Between the Lines
- The Next Great Pandemic
- Tesoro (TSO) Fights California Ethanol Mandate
- Tax-Exempt Money Market Funds