I'm doing a presentation in which I am making an proposition to buy the starbucks stock. Can someone give me pointers on what to look at in thier financial statements, that maybe aren't so obvious.
2006-11-21 13:14:34 · 4 answers · asked by Pete 2 in Business & Finance ➔ Investing
One thing you'll want to focus on is same store sales, which is one of the primary performance metrics in SBUX's industry. Note last quarter they blew out their earnings and same store sales were great. However, you should also acknowledge that SBUX is an expensive stock. Granted, it's growing at a very healthy rate, but the PEG ratio is over 1.75, which measures the P/E relative to the growth.
2006-11-21 15:46:47 · answer #1 · answered by Robert J 1 · 0⤊ 0⤋
If you look strictly at a historical chart of Starbucks' performace and price levels, you will see that there is a low of about $26 and a high of about $40. This its historical resistance point, and it does not often rise above that level. As Starbucks is currently near its resistance point, a wise investor would wait for the next cycle to its lower resistance point, and then trade into the stock, with the expectation of a cyclical gain. This is a typical practice of any good stock investor. Most stocks can be viewed in historical charts of a variety of date ranges at many financial Web sites.
2006-11-21 13:39:53 · answer #2 · answered by NavelRing 1 · 0⤊ 0⤋
take starbucks' current debts and long term debts added together. Take profit from income statement. The ratio of the first calc and the second calc will reveal how well they do compared to the same stats taken from other corporations.
The margin of safety that profit could pay for all a corporation's debt or at least a good chunk of it makes a corporation worth buying or further evaluating.
Another fun thing to do is see if how much debt cash flow could pay. Comparing across companies best brings out the differences and magnitudes.
When picking choosing companies to compare like picking stocks for a portfolio it doesn't take many huge corporate stocks to hold to have a traditional balanced portfolio.
2006-11-21 13:25:21 · answer #3 · answered by fillblanks 2 · 0⤊ 0⤋
What you have to do is an earnings projection for the next five years. Calculate the dividend from the payour ratio for these five years and discount it with the fifth years price got by the CAPM formula d1/ks-g. This will give the intrinsic value of the stock. Then check up the strategies of SBUCKS and see how well they are strategically placed to face the future, opportunities, threats etc; and make a decison from there.
2006-11-21 18:35:12 · answer #4 · answered by Mathew C 5 · 0⤊ 0⤋