Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Starbucks Corporation as such a stock due to the following factors:
- SBUX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $343.4 million.
- SBUX has a PE ratio of 8162.0.
- SBUX is currently in the upper 30% of its 1-year range.
- SBUX is in the upper 25% of its 20-day range.
- SBUX is in the upper 35% of its 5-day range.
- SBUX is currently trading above yesterday's high.
- SBUX has experienced a gap between today's open and yesterday's close of 0.3%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on SBUX:
Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single serve products, and juices and bottled water. The stock currently has a dividend yield of 1.3%. SBUX has a PE ratio of 8162.0. Currently there are 17 analysts that rate Starbucks Corporation a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Starbucks Corporation has been 4.2 million shares per day over the past 30 days. Starbucks has a market cap of $61.5 billion and is part of the services sector and leisure industry. The stock has a beta of 0.73 and a short float of 1.1% with 1.73 days to cover. Shares are up 52.2% year to date as of the close of trading on Wednesday.
rates Starbucks Corporation as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, SBUX's share price has jumped by 60.16%, exceeding the performance of the broader market during that same time frame. Although SBUX had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- SBUX's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 443.2% when compared to the same quarter one year ago, falling from $359.00 million to -$1,232.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, STARBUCKS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Starbucks Corporation Ratings Report.