Starbucks is growing rapidly through growth in new stores and comp store sales.
The stock typically correlates well with revenue growth.
Recent price action shows the stock trading at an overbought level, which could lead to a pullback and better entry price.
Starbucks (SBUX) benefits from many consumers who don't mind spending a few extra bucks to get their caffeine fix on a regular basis. Although the company is well-established with over 30,000 stores worldwide, they are still adding new stores at a strong pace. The existing stores are performing well as evident in recent comp store sales growth.
While Starbucks has a good chance of being a winning investment over the long-term, the stock is trading at an overbought level. The valuation also increased to a higher than average level. This suggests that the stock could pullback on profit taking from large investors.
The article is for informational purposes only (not a solicitation to buy or sell stocks). David is not a registered investment adviser. Kirk Spano is an RIA. Investors should do their own research or consult a financial adviser to determine what investments are appropriate for their individual situation. This article expresses my opinions and I cannot guarantee that the information/results will be accurate. Investing in stocks involves risk and could result in losses.
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