Recs

0

Is This a Red Flag for Starbucks?

By | More Articles
November 22, 2012 | Comments (1)

Starbucks (Nasdaq: SBUX  ) made waves last week, when it announced its huge $620 million acquisition of Teavana (NYSE: TEA  ) . The price put a 52% premium on the company and has many wondering whether Starbucks overpaid. 

The company has been on an acquisition tear recently, which puts up a small red flag for the Fool's Austin Smith. While Starbucks is an incredible operator, he argues that it became great by intensely focusing on its strengths. These moves put the company in new markets and may dilute its energy away from being the great operator we've seen in the past.

See more in the following video.

While Austin loves Starbucks as a company, it still wasn't selected to be one of the 3 Stocks That Will Help You Retire Rich that our top analysts identified for long-term investors. In the report, we name those stocks that could make your retirement a breeze. Click here now to start reading.

Jeff Fischer and team have demystified options. And they can rack up income like $1,030... $2,626... and $3,228 on a schedule you can set your watch by!
That's why we're glad to announce every single one of their closely guarded strategies is available to YOU during May and June – 100% FREE, no strings attached! Just enter your email address in the box below...

Austin Smith owns shares of PepsiCo. The Motley Fool owns shares of PepsiCo, Starbucks, and Teavana Holdings and has options on Starbucks. Motley Fool newsletter services recommend Monster Beverage, PepsiCo, 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.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 23, 2012, at 12:24 AM, jwlarson3 wrote:

    I really hope that SBUX can take this company in a new direction. I stop in a Teavana if I happen to pass one in a mall, but they are not really near me. They tend to be in the more upscale malls in the DC suburbs. I don't see the overlap with the TAZO brand really. TAZO is in the starbucks store almost as an afterthought. The quality and variety in a Teavana store really goes after the "true" tea fans. If they can expand the number of stores, put in a beverage bar at each of them, and bring the exotic teas to their new Verisimo; that's where i see this acquisition really being able to pay off. I just hope they have the vision to do it. The international demand for high quality tea houses could be another major revenue stream and expansion goal.

Add your comment.

Compare Brokers

Fool Disclosure

DocumentId: 2124290, ~/Articles/ArticleHandler.aspx, 5/18/2013 3:19:50 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 15,354.40 121.18 0.80%
S&P 500 1,667.47 17.00 1.03%
NASD 3,498.97 33.73 0.97%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
TEA $0.00 Down +0.00 +0.00%
Teavana Holdings,… CAPS Rating: **
SBUX $64.13 Up +0.58 +0.91%
Starbucks CAPS Rating: ****
PEP $83.80 Up +0.06 +0.07%
PepsiCo, Inc. CAPS Rating: ****
MNST $56.91 Down -0.30 -0.52%
Monster Beverage CAPS Rating: ***
JMBA $2.83 Down -0.01 -0.35%
Jamba, Inc. CAPS Rating: ***

Advertisement