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Strategies & Market Trends : Turnarund Investing

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Aug 1 5:00 PM EST

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To: batman10023 who wrote (1109)	5/11/2012 12:01:43 AM
From: Good Fundamentals	1 Recommendation of 1876

Batman10023, "the profit margin on the sbux k cup is a small fraction of the profits on the regular ones" Yep - that's why SBUX should be concerned about the K-Cup patent expiring. Now that SBUX is moving into K-Cups and Verismo, the real loser could be SBUX. Gross margins will get hacked and net margins will become marginal. That's why I'm tempted to buy SBUX- stock (or calls now) and then dump those next January and buy SBUX puts. SBUX is bricks and mortar - GMCR ain't. Both are low debt but SBUX has leases all over the country that will be hard to get out of. GMCR could expand the distribution of Keurig vending machines - no barista needed. Say goodbye to several Starbucks. The play here is shorting Starbucks.

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