Saturday, June 9, 2007

More on SBUX and some WFMI thoughts

Some more thoughts on sbux. Too much negativity in this stock. It may have 2 or 3 more points of downside and I hope they do because then I'll add more. It's a solid yuppie brand and has lots more room to grow. There's enough yuppies to support a store (or 5) in every town from here to Timbuktu + don't forget all the boomer moms all over the world who love their sbux coffee. + China. Anything under 25 (if it falls there) is a total steal imo.

FY08 est is $1.08. 25p/e = $27. Good enough here for me. 22 p/e (Next 5 years est. growth rate is 22%) = $23.76, which would be a steal.

Just read this. Umm no. Nobody that goes to sbux wants some cheap clutter. put down the thinkin' pipe. lol.

Another beat up yuppie brand is Whole Foods and I wouldn't touch that here. 30 and under it becomes interesting. WFMI has been overpriced for at least two years and I wouldn't pay more than 20x next years est. earnings for it. Sure the stores have a cool atmosphere but its product is not exclusive. Safeway and others have been remodeling their stores to copy the WFMI model. + Paying $5 for a cup of coffee is one thing but paying $15 for some organic chicken that's $10 more than what you get at your local grocer is another. Nobody sees you eating that chicken and that's more important for these guys than the actual product.

No comments: