> All the short arguments seem emotional and hopeful rather than based
> on some long-term business impairment. P/E ratios don't help much when
> companies have gone through a period of write-offs that distort
> earnings. SBUX closed unprofitable stores that were likely stealing
> business away from close by stores rather than serving new customers.
> This usually impacts profits over a few quarters and then improves
> margins by reducing SG&A overhead.I adjusted SG&A down just slightly
> in the future having it return to historical averages.

> All the short arguments seem emotional and hopeful rather than based
> on some long-term business impairment. P/E ratios don't help much when
> companies have gone through a period of write-offs that distort
> earnings. SBUX closed unprofitable stores that were likely stealing
> business away from close by stores rather than serving new customers.
> This usually impacts profits over a few quarters and then improves
> margins by reducing SG&A overhead.I adjusted SG&A down just slightly
> in the future having it return to historical averages.

> "P/E ratios don't help much when
> companies have gone through a period of write-offs that distort
> earnings."

> Whoa, whoa, whoa hwhat??
> The only distortion is that SBUX earnings were distorted up!! As in if
> you save a cost one time your earnings will look better only that one
> time. That's exactly what they did. Next year when they have already
> leaned down, there will be nothing to cut to boost profits!!  Which is
> why having a P/E ratio this high is even more lucrative. A P/E ratio
> over 30 tends to mean rapid growth or widespread belief of growth to
> be in the future. Starbucks is closing stores. Starbucks is cutting
> costs just to make a profit. So it is actually at the exact opposite
> and should be trading around 15 times earnings (or lower), because
> growth looks unlikely.

> If you had the market cap, and you bought starbucks it would take 61
> years to get your money back. (when you throw in time value of money,
> it would cost far far far longer probably over 100 years) Needless to
> say 100 year payback period is awful, and so is this stock's price.

> On Sep 9, 10:48 am, Steve <spend...@gmail.com> wrote:

> > I put together a model with some single digit sales growth and nominal
> > margins going forward. It seems that they are worth more like $24 to
> > $25. If recent price increases and lower milk prices have more impact
> > than my assumptions, shares could be worth more.
> > If you want to see the numbers, I posted them at:
> > invalueable.net/forum/view/493

> > All the short arguments seem emotional and hopeful rather than based
> > on some long-term business impairment. P/E ratios don't help much when
> > companies have gone through a period of write-offs that distort
> > earnings. SBUX closed unprofitable stores that were likely stealing
> > business away from close by stores rather than serving new customers.
> > This usually impacts profits over a few quarters and then improves
> > margins by reducing SG&A overhead.I adjusted SG&A down just slightly
> > in the future having it return to historical averages.

> All the short arguments seem emotional and hopeful rather than based
> on some long-term business impairment. P/E ratios don't help much when
> companies have gone through a period of write-offs that distort
> earnings. SBUX closed unprofitable stores that were likely stealing
> business away from close by stores rather than serving new customers.
> This usually impacts profits over a few quarters and then improves
> margins by reducing SG&A overhead.I adjusted SG&A down just slightly
> in the future having it return to historical averages.