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SBUX is attempting to go global during a very difficult period in time.  Some of the highest income earners in China are coal workers, and I for some odd reason don't see coal workers buying a grande quintuple-shot non-fat vanilla latte macchiato with room for soy milk on their way to the coal mine.

While SBUX squanders cash to expand their business marketing to coal miners in China, profits are contracting in America as debt-laden Americans ratchet down to Folgers crystals.  The best part of wakin' up is Folgers in your cup.  .

Filed under: Forecasts, Bad news, Consumer experience, Competitive strategy, Starbucks (SBUX), Newsletters, McDonald's (MCD), Stocks to Sell, Recession

Thursday morning, Starbucks (NASDAQ: SBUX) CFO released a statement saying that the company would fall short of analyst estimates for the current quarter.

CEO Howard Schultz tried to calm the market by saying that SBUX would come out of this recession a stronger, leaner company as a result.

With the upswing in inflation and the massive job losses that we are seeing, Starbucks is going to pay the price.  I've decided that I'm going to short them for the long run.  Just go to your local Starbucks and notice how few people are dropping in. 

Starbucks has developed too many stores in the recent years.  They have recently scaled back and shut down many stores.  With the inflation we will be experiencing and the loss of jobs, Starbucks patrons will not be driviing to get coffee as much and this is going to hurt them in a big way.

Filed under: International markets, Starbucks (SBUX), Newsletters, Stocks to Buy

"I've spotted an excellent opportunity to cash in on the turnaround of one of America's most visible companies -- Starbucks (NASDAQ: SBUX)," says Jim Stanton.

The quantitative analyst and contributing editor to Xcelerated Profits Report explains, "I've had my eye on a number of retail stocks for some time now, looking for signs of a potential turnaround, and Starbucks is now high on my list."

"I’ve spotted an excellent opportunity to cash in on the turnaround of one of America’s most visible companies -- Starbucks (NASDAQ: SBUX)," says Jim Stanton.

The quantitative analyst and contributing editor to Xcelerated Profits Report explains, "I’ve had my eye on a number of retail stocks for some time now, looking for signs of a potential turnaround, and Starbucks is now high on my lis."

"One of the main reasons for the slide in SBUX shares from its high of $40 in November 2006 was the overly aggressive expansion plan.

Starbucks (Nasdaq: SBUX) is probably not the first company that comes to mind when thinking of a value play. As discussed here, small-caps usually offer the best opportunities when it comes to finding stocks trading at discounts to their intrinsic values. With a market cap north of $11B and a large analyst following, one could argue that for Starbucks there is little room for market inefficiency. However, the recent challenges facing Starbucks in today’s weakened economy have likely caused its share price to be unjustifiably over-punished by the markets.

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Starbucks (SBUX) is too expensive and not just the coffee but the stock itself. The stock reached a new 52 week low today as the market sold off during the morning and has rebounded some. But the price to earnings of the stock is still too expensive for the limited revenue growth and the declining earnings the company is now experiencing.

BusinessWeek Rankings

BusinessWeek 50

2008   #16

2007   #28

Filed under: Forecasts, Consumer experience, Competitive strategy, Starbucks (SBUX), McDonald's (MCD), Stocks to Buy

I'll admit the headline is a bit deceptive. On one hand McDonald's (NYSE: MCD) has seen a resurgence in its business and frankly, the shares have done very well. In fact since McDonald's went through its own set of problems five years ago, the stock has since tripled in value.

Recap of CNBC's Fast Money, Monday June 16. Click on a stock ticker for more analysis.
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Gassing Up: Chesapeake (CHK), AMR (AMR)

The Dow finished lower on worries about the economy, but Najarian pointed out volatility is also lower, thanks to the drop in oil prices. However, oil initially rose to a record high of $139 before it fell on the news that Saudi Arabia will beef up production. Joe Terranova said everything points to Friday, when the contracts come off the front of the board. However, he would buy natural gas. Najarian is bullish on CHK and AMR.