Trade-Ideas: Starbucks Corporation (SBUX) Is Today's New Lifetime High Stock

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 Starbucks Corporation ( SBUX) as a new lifetime high 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 $345.6 million.
  • SBUX has traded 6.9 million shares today.
  • SBUX is trading at a new lifetime high.

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More details on SBUX:

Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. As of September 30, 2012, the company operated 9,405 company-operated stores and 8,661 licensed stores. The stock currently has a dividend yield of 1.2%. SBUX has a PE ratio of 34.3. Currently there are 15 analysts that rate Starbucks Corporation a buy, no analysts rate it a sell, and 8 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 $50.7 billion and is part of the services sector and leisure industry. The stock has a beta of 0.79 and a short float of 1.2% with 1.84 days to cover. Shares are up 26.2% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Starbucks Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 11.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • STARBUCKS CORP has improved earnings per share by 27.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, STARBUCKS CORP increased its bottom line by earning $1.79 versus $1.62 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.79).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 26.0% when compared to the same quarter one year prior, rising from $309.80 million to $390.30 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, STARBUCKS CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has significantly increased by 179.23% to $305.20 million when compared to the same quarter last year. In addition, STARBUCKS CORP has also vastly surpassed the industry average cash flow growth rate of 3.36%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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