Starbucks (NASDAQ:SBUX)
Trading at $50.55 as of 2/9/05

This article is part of our annual Stocks Fools Love Valentine's Day special.

Oh, Starbucks (NASDAQ:SBUX), how do I love thee? Let me count the ways.

Not least of my reasons for loving Starbucks is because I know about it. And the principal reason I know about it is because I happen to be addicted to its products. Although being an avid user of a product is no reason to think about the investing story for a stock, it's a good place to begin. A Starbucks addiction may give you that first glimmer of a crush, leading up to the exploration of what's to like about the stock.

For example, I know that Starbucks' outlets are generally bustling. I know that its famous baristas seem to be getting better at cranking out the orders faster (my local baristas have been known to see my approach from across the street and have my drink ready and waiting by the time I arrive). I know that the coffee there is phenomenal, one of my favorite daily treats. I also know that a "Starbucks on every corner" isn't some creepy sign -- it only means I can get my fix that much easier. If there's a Starbucks experience, I know all about it.

You may think this is just chemistry at work, not true love. But I've given it time and done some homework, digging a little deeper.

It's the kind of stock you can take home to Mother. After all, it's a stock that people feel good about owning. Not only because of its daily role in so many lives but also because it has a stellar reputation for socially responsible initiatives. You're hard-pressed to find a company in foodservice that treats its employees so well. It's an avid proponent of Fair Trade practices. And Starbucks uses recycled materials, too.

On the other hand, recent detractors have been agonizing over signs of a slowdown. Take a look at my coverage of its most recent same-store sales figures for some background. (However, if you take a look at the last quarter, it's easy to pooh-pooh such fickle reactions.) Meanwhile, some worry that international expansion won't go so well, in particular in markets like France and Germany, where there's a fair amount of cafe snobbery and some degree of anti-American sentiment.

Well, these arguments strike one as very similar to those that faced Starbucks several years ago, when naysayers complained that people wouldn't be willing to ante up more than a couple quarters or a rumpled old one-dollar bill on a cup of joe, or wrung their hands over the idea of a Starbucks on every street corner. In reality, Starbucks excelled despite those negative arguments -- all of which sounded perfectly logical at the time.

And of course, this reminds me of a recent conversation I had with our resident sage of Motley Fool Rule Breakers, David Gardner. He said that with many strong brands, like that which Starbucks sports, a history of strong growth and outperformance is a perfectly good reason to believe that such growth will continue. Why bet against the best? That thinking applies right here.

Despite the fickle day-to-day leanings of investors who put too much worry into the month-to-month machinations of same-store sales, Starbucks has a lot more aspects to love. You've got to love its hot balance sheet, with $788.2 million in cash and equivalents and a mere $3.6 million in long-term debt. That means that it's funding its heated expansion without piling on unwieldy debt -- a good justification for love if I ever heard one.

Meanwhile, another metric Fools love is free cash flow, which illustrates the amount of cash available once all is said and done. In fiscal 2004, Starbucks increased its free cash flow by 95% to $407.7 million.

And with earnings and sales growth consistently clocking in at the 20%-to-30% range, I have a hard time seeing what's not to love. There are plenty of investors out there who would greatly envy such a growth rate in sales and earnings in their stock picks, not to mention Starbucks' ability to boost free cash flow generation.

Starbucks' premium price, of course, is one that many investors sweat about. However, as I said before, current negativity may give investors a sweet period for investing in this stellar stock, since it recently reached levels not seen since last October. Sometimes you've got to pay up for a stock so many people love, with an eye toward a long-term commitment.

On Valentine's Day, many of us know that love is something that makes you feel good. When you look at Starbucks -- the company and the stock -- you can see why this is a stock Fools can love with its feel-good charms. When it comes to Starbucks, I've got my heart on my sleeve.

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Alyce Lomax does not own shares of Starbucks, though it's on her wish list. If you're wondering why she hasn't invested in it yet, the Fool has a strict trading policy, and if she could only resist her lust to write about this stock, she'd be able to buy in. The Motley Fool has a disclosure policy.