SBUX

Starbucks Issues Strong Fiscal Second-Quarter Results; Raises Guidance

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Starbucks () posted solid fiscal 2012 second-quarter results after the close Thursday. Though we liked the quarter, we think the share price is a bit ahead of the company’s valuation. We’ll likely be raising our fair value estimate for Starbucks after factoring in the stronger-than-expected performance, but we still believe the shares are significantly overpriced. The coffee chain’s revenue advanced 15% thanks to global comparable sales growth of 7% driven almost entirely by increased traffic. Starbucks’ China business did quite well, too, notching its seventh consecutive quarter of comparable sales growth exceeding 20%. Further, the company continues to experience strong sales of its Starbucks- and Tazo-branded K-Cup packs, with revenue in its Channel Development segment jumping almost 60%. During the quarter, Starbucks opened … Read more

Placing Green Mountain’s Fair Value Under Review

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There are stocks with bull and bear arguments, and then there’s Green Mountain Coffee Roasters (GMCR). A lot of shorts recently became interested in the stock when hedge-fund manager David Einhorn released a presentation detailing his bearish argument against the firm. The company’s shares went into a large slide, losing over 50% of its value from that time. That was, until it reported a first quarter earnings beat, fueled by a divestiture of its “Filterfresh” brand and Green Mountain rallied back to $70 per share. Oh, and then of course, Starbucks (SBUX) recently announced the creation of its own single-serve espresso machine, which is an adjacent product of the Keurig single-serve coffee machine, sending Green Mountain’s shares tumbling back towards … Read more

Starbucks is Firing on All Cylinders But Shares Are Expensive

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Starbucks (SBUX) reported excellent fiscal first-quarter results Thursday but its outlook fell below optimistic consensus forecasts. We don’t expect to make a material change to our $38 per share fair value estimate. Total revenue in the quarter expanded 16% to a record $3.4 billion on the heels of strong global comparable same-store-sales growth of 9% (7% increase in traffic and a 2% increase in the average ticket price). Same-store-sales growth was also 9% in the Americas region during the period, while it was only 2% in EMEA (Europe, Middle East, Russia, and Africa) as a result of softness in Europe. During the quarter, the company opened 241 net new stores globally and has now reached 500 stores in mainline China and Latin … Read more

Starbucks Posts Fantastic Fiscal Fourth Quarter; 2012 and 2013 are Looking Even Better

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Starbucks (SBUX) reported strong fiscal fourth-quarter results after the close Thursday that showed excellent same-store sales expansion and an improved business outlook, despite higher coffee costs. We’re sticking with our $32 per share fair value estimate, as we had expected the strong results. Total revenues, on a comparable 13-week basis, jumped about 15%, while earnings per share increased 16% to a record $0.37, excluding non-recurring items (above expectations). Global comps jumped 9% on a comparable 13-week basis thanks to a 6% jump in traffic and a 3% increase in ticket prices (US comps increased 10%, while international comps advanced 6%). Such growth accelerated from previous periods, as for the full fiscal year 2011, global comps increased 8% and came in … Read more

Dividend Increases/Decreases for the Week Ending July 27

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Below we provide a list of firms that raised their dividends during the week ending July 27. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Access National (ANCX): now $0.16 per share quarterly dividend, was $0.15. Alliance Resource Partners (ARLP): now $0.52 per share quarterly dividend, was $0.515. Archrock (AROC): now $0.132 per share quarterly dividend, was $0.12. Ares Commercial Real Estate (ACRE): now $0.29 per share quarterly dividend, was $0.28. Arrow Financial (AROW): now $0.26 per share quarterly dividend, was $0.25. BancorpSouth (BXS): now $0.17 per share quarterly dividend, was … Read more

There Is Milk At The Store

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This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … Read more

Euphoria Running Rampant: Investigating Some of the Hottest Names Around

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Image Source: Tesla Roadster As we march forward in what Morgan Stanley has dubbed a bull market of “epic proportions,” euphoria appears to be at levels perhaps not seen since the dot-com bust of the early 2000s. Let’s take a look at some of the “hottest” names on the market. By Kris Rosemann and Brian Nelson, CFA Earlier this month, Ireland (IRL, EIRL) borrowed five-year paper at a -0.008% (negative 0.008%), meaning that the country is being paid to borrow. If you recall, we penned a piece in April 2016, that commented on an obscure article in the Journal where a Danish couple was being paid interest on their mortgage (that’s right – they are being paid interest, not paying … Read more

8 Announcements and Top Research You May Have Missed

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8 Announcements. This article was sent to members via email March 27. By Brian Nelson, CFA Hi everyone, Brian here. Trust you are doing great! Here are eight announcements I want you to be aware of: Everything we do is for our members. We’re very proud of the outperformance of the Best Ideas Newsletter portfolio, that we’ve never had a dividend cut in the Dividend Growth Newsletter portfolio, that our high-yield ideas are holding up very well, and the success rates of the Exclusive capital-appreciation ideas and short-idea considerations are running at approximately 80%. We’re proud to be your research partner. The odds of a Fed rate cut are going up as yield-curve inversion continues to threaten. The risks are more behavioral in … Read more