Starbucks (SBUX)

They were the darling of Wall Street for many years with high multiple as they continued to grow. Now they hit a rough patch. The multiple is still in the low 20’s. Probably too high for his liking. He prefers to pay a higher price for more certainty.

A long-tome owner, despite this going sideways for a few years. China hasn't yet panned out, with some missteps. It opens a store every four hours around the world. Still likes it. They're working through mobile ordering. It will break-out. He's sticking with it.

Trying to recalibrate. P/E used to be higher. Trying to get into alcoholic beverages. Still looks pricey. Wait for another quarter before getting back in.

They are watching it and love the growth they see. Going into China should be a good move for them. The new offerings, including alcohol, add to the growth opportunity. He would watch for a good entry point, but holding for a long term investor is good. Yield 3%.

Expanding into China is key. Headwinds are management turnover and competition from custom coffee shops--Starbucks is no longer special or unique. Let's see what Q2 earnings are like.

They are trying to expand into other areas like salads. However, there are so many locations now that they could be cannabilizing each other. True, the company is doing really well, but is the stock doing very well? Look at valuation.
Starbucks is in the low/mid-$20s. That said, China loves Starbucks and there's big opportunity here for Starbucks. Research this.

(A Top Pick May 9/17, Down 19%) It got whacked very recently. Last week they put up some bad news. That is what happens in the US when you change your story. Coffee land is competitive. It is a good global franchise that has done nothing.p