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Message from discussion STARBUCKS STOCK IS OVERPRICED
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Ian  
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 More options Aug 6 2009, 12:38 am
From: Ian <ian.ri...@gmail.com>
Date: Wed, 5 Aug 2009 21:38:29 -0700 (PDT)
Local: Thurs, Aug 6 2009 12:38 am
Subject: Re: STARBUCKS STOCK IS OVERPRICED
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Thats my logic too.  Their earnings from last quarter were fine, but
they cut expenses in ways that can't be sustained long term.  They're
even slashing employee benefits which I think is a mistake.  They
attract competent, friendly employees that add to the customer
experience because they pay them well.  I don't want a person who
can't form a sentence serving me coffee.

Personally I think the McDonalds/DD crowd is a different demographic,
but still, SBUX will lose some market share, especially customers who
simply want convenience.

Their growth potential just isn't what it was a few years ago, and the
earnings multiple isn't justified.  Maybe SBUX will go to 20, but I
don't know why anyone would pay that much.

Peabody?

On Aug 5, 1:22 pm, Tim Conley <tcon1...@gmail.com> wrote:

> Actually it isn't. It's overpriced. Would you pay 12 billion to buy
> the company, when it made only 100 some million last quarter?

> If you've ever heard of payback period, and time value of money you
> know that would be a HORRIBLE play. Not to mention the fact that there
> should be no expectation that Starbuck's profits would grow
> considerably in the future. They are actually closing stores in the
> US. They have lost market share to competitors like McDonalds and
> Dunkin' Donuts, and the only reason the had a profit at all in the
> last quarter was because of one time cost saving measures (like
> closing unprofitable stores). You can't save your way to prosperity,
> as the saying goes. (not that I'm saying you shouldn't have cost
> saving measures, bravo to starbucks for cutting the fat)

> So we have a company trading at 55 times earnings. 55 times bloated
> one time earnings (meaning if you bought Starbucks it would take 55
> years to get your money back) I like SBUX, just not at 18 and change
> when they have 14+ million shares outstanding. Honestly I wouldn't
> give them much more than 10, (still 30 times earnings, and then only
> because of international sales)

> On Aug 1, 11:11 pm, "C. Peabody" <ca.peabod...@gmail.com> wrote:

> > Actually, SBUX is about a twenty dollar stock... but thanks for
> > chiming in.

> > On Aug 1, 4:51 pm, Hello Yall <sayhellotoy...@gmail.com> wrote:

> > > Starbucks is no longer a growth story. Google Finance shows a PE ratio
> > > of 55.3 for SBUX. Unemployment is still rising and lofty earnings
> > > estimates alone cannot  counter today's economic reality. From a low
> > > of $7 to $17.75 I view SBUX today as overpriced.- Hide quoted text -

> > - Show quoted text -


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