Starbucks, Tablets, and Disappointment from an IPO Darling

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

With fresh economic news indicating that China's economy is still slowing, the major U.S. indexes are heading south today. As of 1:15 p.m. EST, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 22 points, or 0.14%, while the S&P 500 and the Nasdaq have respectively lost 0.15% and 0.10%.

A few individual companies are also heading lower today. Let's see why.

Shares of Starbucks (NASDAQ: SBUX  ) are trading lower by more than 3% after ITG analyst Steve West gave the coffee company a poor outlook. West believes Starbucks' momentum is slowing after two strong quarters. He also believes that while the company will continue to grow through innovative product offerings and higher traffic, U.S. same-store sales growth in 2014 will be between 5% and 6%, below the consensus estimate of 6.6%. Furthermore, West said his channel checks showed slower traffic at stores in October and November compared to September. As I have said before and surely will say again, this is one analyst's opinion and investors shouldn't jump ship simply because of what one person says. Take this with a grain of salt and remember that West is not likely looking at the big long-term investing picture, but simply what Starbucks may do in the next quarter or year.  

Another food company making news today is DineEquity (NYSE: DIN  ) . Although the company initially announced plans last week to have tablet computers at all Applebee's restaurant tables for ordering food and paying, CNBC picked the story up this morning and interviewed CEO Julia Stewart, which helped to open this story up. Shares of DineEquity are down 2% at this time, as shareholders may see more downside risk to this idea than potential profit. While the company doesn't plan to cut staffing due to the new computers, there doesn't seem to be a huge return on investment. Sounds like a big cash burn to me.  

Lastly, shares of Burlington Stores (NYSE: BURL  ) are down 10% after the company reported earnings earlier this morning. This was the first earnings release since the company went public back in October and it didn't go as well as many investors were hoping. The company reported a quarterly loss of $16.9 million, up 128% from this quarter a year ago. But the company did say $10.5 million of that loss was due to the IPO and expenses related to debt. For a stock that was on fire since going public and trading at a price-to-earnings ratio of more than 43, the company needed to perform perfectly, which it clearly did not.  

More Foolish insight

The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!


Read/Post Comments (0) | Recommend This Article (3)

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2759601, ~/Articles/ArticleHandler.aspx, 9/25/2016 10:03:12 PM

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 2 days ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

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

9/23/2016 4:55 PM
^DJI $18261.45 Down -131.01 -0.71%
BURL $83.05 Up +0.13 +0.16%
Burlington Stores CAPS Rating: **
DIN $80.25 Up +0.32 +0.40%
DineEquity CAPS Rating: **
SBUX $54.43 Up +0.04 +0.07%
Starbucks CAPS Rating: ****