Starbucks, boom or bust?? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Starbucks, boom or bust??

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext

To: Laura Marie Ibsen who wrote ()	11/14/1996 1:20:00 PM
From: benwood	of 11

Apparently the selling on Nov 13th was nervousness prior to the release of 4th quarter earnings. Not that atypical for a stock whose price is in the stratosphere. In looking at their press release, I notice that their operating earnings increased 49.7% over FY95, but their EPS only gained 30.5% due to the addition of 12.7% new shares (mostly a secondary offering last December). Their operating profits for FY96 were just 47 cent/share, so their P/E today is 73 using the trailing 12 months (operating profits). Would you buy it's stock when it was priced at 73 times earnings if it's growth outlook is only around 30% on a fully diluted PER SHARE basis? I think what's happening today (Nov. 14th) is the funny-money investors are surging in on the news of the 7 cents -> 16 cents 4th Qtr. results. Sounds good on the surface, doesn't it! It would be a shame to scratch a bit deeper and see what's underneath... Check out the long term chart for Starbucks. Notice that it had a significant peak 1 to 2 weeks following the 4th qtr. results in 1995 and in 1994, only to fall significantly by mid-December. Hmmm... For more recent posts, check out another SBUX forum... I don't recall the title, but just search for SBUX and see which has the recent stuff in it. I won't venture a recommendation for you on buy/hold/sell -- it's your portfolio. I shorted SBUX today, though, so that's where I stand.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext