In a recent Form 13F filing with the Securities and Exchange Commission (SEC), Advisor Partners II LLC declared a 20.1% increase in its stake in Starbucks Co. (NASDAQ:SBUX) during the fourth quarter, taking its ownership to a total of 62,546 shares. This translates into an additional purchase of 10,458 shares during the mentioned period. The value of Advisor Partners II LLC’s holdings in Starbucks amounts to $6,205,000 as indicated by its most recent SEC filing.
Starbucks Corp., renowned for its premium coffee offerings and retail chains across the United States and Canada, continues to be a favorite of investment firms such as Advisor Partners II LLC. The company runs through various segments such as North America, International, Channel Development, and Corporate and Other. The International segment includes Asia Pacific, Europe, Middle East, Africa along with Latin America & Caribbean regions.
The market price of Starbucks opened at $98.46 on Tuesday having a market cap worth $112.87 billion coupled with an attractive P/E ratio of 31.97 as well as an impressive P/E/G ratio valued at 1.69 resulting in a beta score consistent with investors’ expectations at only 0.96 which reveals that this stock fails to match wider market variability.
Despite macroeconomic headwinds presented by restrictions resulting from COVID-19 impact on food service businesses throughout the globe which include those operated by Starbucks too; it has been able to sustain steady momentum when tracked over time scales such as fifty-day moving average observed at $104.69 or two-hundred day session equivalent observed at $103.65 ensuring consistent growth factors supporting long term investment perspectives.
The share prices for SBUX appear quite attractive relative to their peer group average representing moderate consistency between earnings per share growth trajectory aligned against Head-to-Head industry peers having top line revenue exceeding industry averages on average by ~2%. Further scope for upside would come from more extensive footprint expansion for the corporation within its consumer base while undertaking cost control measures in operations resulting in favorable profit margins. Overall, with strong fundamental support and with the backing of several investment conglomerates such as Advisor Partners II LLC, Starbucks may be a safe bet for conservative investors and investment groups alike.
[bs_slider_forecast ticker=”SBUX”]
Starbucks’ Strategic Diversification and Global Expansion Drives Impressive Earnings and Bullish Stock Activity
Starbucks’ strategic diversification of channels and global footprint is paying off as the company continues to report impressive earnings. In the first quarter, the company beat analyst estimates with an increase of 10% in net revenue and a 13% increase in EPS compared to the previous year. The coffee chain’s success is reflected in its share price, which has topped $60 per share according to recent reports.
The bullishness of Starbucks’ stock can be seen through the buying activity of institutional investors. Hedge funds have bought several positions in Starbucks shares in recent times, with ownership by this group accounting for 69.16% of the total stock as at fourth quarter last year. Detailed among these are Piershale Financial Group Inc., My Personal CFO LLC, Delta Asset Management LLC TN, Red Tortoise LLC and Riverpoint Wealth Management Holdings LLC derived new postions, implying their faith in the future performance of Starbucks.
Starbucks is expanding its global footprint beyond North America into countries such as China and Japan. The coffee giant revealed a bold plan to open more than 12,000 stores globally over five years by 2021.The expansion comes as competition heats up with other quick-service food vendors – such as McDonald’s and Dunkin’ Donuts – ramping up efforts to get a slice of the breakfast market that has been dominated traditionally by Starbucks.
In response to competition, Starbucks is focusing on keeping its customers engaged and loyal through increased technological innovation utilising mobile-ordering app creation capabilities to ease customer experience both inside stores and while ordering via drive-thru windows.
Analysts have also given suggestions for possible improvement strategies for the firm including improving store traffic, increasing product mix per customer and innovating products sold in stores. According to Bloomberg, analysts covering the coffee chain are bullish with an average target price of $110.31 and consensus of “Moderate Buy” given Starbuck’s impressive growth strategy plans.
Starbucks’ quarterly dividend, paid out last month with shareholders receiving $0.53 per share, is an indication of its confidence in long-term stability and potential for growth, a sentiment shared by institutional investors who derive several positions in Starbucks shares. Starbucks could do well to remain optimistic about its outlook as expectations are high and competition increases.