Investing in Starbucks Stock in 2012 and Beyond…

Flashback: Personal Finance: Should I Invest in Starbucks Stock?

Starbucks Corporation (NASDAQ:SBUX) just purchased La Boulange Bakery for $100 million, the Bay Area’s upscale chain of French bakeries.

Was this a good move? I don’t know for sure.

Remember, not too long ago Starbucks bought the juice company, “Evolution Fresh” for $30 million.

. . . .

“Coffee giant Starbucks Corp announced Thursday that it acquired juice company Evolution Fresh for $30 million.

The java chain will take another step into the health and wellness industry with new juice bars set to open in the West Coast some time next year…”Huffington Post

Starbucks Buys La Boulange Bakery

Huffington Post also covers this story with its article, “Starbucks Buys La Boulange Bakery for $100 Million to Improve Food Offerings”.

The Seattle-based coffee shop chain says baked goods from La Boulange will start replacing its current lineup early next year, starting with French pastries such as the croissant. Products will start appearing in Bay Area stores first then roll out nationally.

Starbucks also says it plans to make the San Francisco-area bakery into a national presence in the years ahead.

Is Starbucks a Worthy Investment for the Future?

Should you invest in Starbucks stock?

As I have said before in previous posts; no one can accurately predict the future. That said, analysts can study charts and trend lines of a stock and predict where it can go, potentially. Also, one can study the valuation of a company, its fundamentals, earnings reports, and financials to get an idea of the health of a company and its potential for growth.

However, there are a few key points to note regarding Starbucks.

  • Starbucks’ success in further growth into China and Asia.
  • The potential for Starbucks to become the next big conglomerate corporation (i.e. General Electric, Proctor and Gamble, etc.)
  • Success next year with its new juice division.
  • Success in the future with its food offerings.

A Starbucks Case Study

Overall, all charts point to upward growth, with resistance and support trend lines sloping upward. Only in the past month has Starbucks stock taken a large dip, but only because the entire stock market was affected by the Euro Crisis and last months dismal Jobs Report.

A well-written case study further covers Starbucks Corporation’s history and growth.

Industry analysts in 1998 saw Starbucks as being well on its way to becoming the Nike or Coca-Cola of the specialty coffee segment. It was the only company with anything close to national market coverage. The company’s most immediate objective was to have 2,000 stores in operation by the year 2000. Its longer range objective was to become the most recognized and respected brand of coffee in the world. The company’s efforts to greatly increase its sphere of strategic interest via its joint ventures with Pepsi and Dreyer’s, its move to sell coffee in supermarkets, and the possibility of marketing fruit-juice drinks and candy under the Starbucks label represented an ongoing drive on Schultz’s part to continually reinvent the way Starbucks did business.

Arthur A. Thompson, The University of Alabama
John E.Gamble, University of South Alabama

Starbucks 9 Month Chart

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Starbucks 1 Year Chart

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Starbucks 5 Year Chart

SBUX-5yr

Disclosure: The author is a long time investor in Starbucks stock, and continues to hold long.

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Carlos Rull

Carlos Rull is a musician living in the San Diego area. His interests include Yoga, Eastern Philosophy, Zen Buddhism, and Gardening. He plays drums, piano, and composes New Age & Ambient music, and his albums are available on iTunes and Amazon.com.

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