Why We're Buying Starbucks

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics around the investing world.

John and David are always looking for quality companies at reasonable prices for their real-money portfolio. That's why they're buying some shares of Starbucks, a great company with first-class management. It has more than 18,000 stores around the world, and that number will grow over time, even with competition from McDonald's and Dunkin' Brands' Dunkin' Donuts. The company is always looking to innovate as well. It's looking to take advantage of the energy-drink market that really took off with Monster Beverages, but wants to do it using natural ingredients. There's also the Verisimo, Starbucks' single-serve machine that can take on Green Mountain's Kuerig. And there's its packaged-goods initiative, as well as its push for more food in its stores. Starbucks has lots of ways to grow. At 24 times forward earnings, Starbucks is reasonably priced relative to its growth initiatives. John and David are excited about adding it to the 10-Bagger portfolio.

Starbucks competitor Green Mountain is cheaper than it's ever been right now. And many investors are wondering whether this represents an attractive opportunity. You can find our recommendation for how to play the company in our new premium research report. In it you'll find everything you need to know about Green Mountain, including whether it's a buy at today's prices. Click here for instant access. 

David Meier and John Reeves have no positions in the stocks mentioned above. The Motley Fool owns shares of McDonald's and Starbucks and has options on Green Mountain Coffee Roasters and Starbucks. Motley Fool newsletter services recommend Green Mountain Coffee Roasters, McDonald's, Monster Beverage, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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