NEW YORK (TheStreet) -- Shares of Starbucks Corp. (SBUX) are down 1.45% to $75.02 in heavy market trading after it was reported that an investment firm sold 6.2 million shares of the company between yesterday's close and today's session, sources told the Wall Street Journal.
Bank of America Merrill Lynch (BAC) facilitated the sale by buying the entire position and re-offering it to clients for $75.15, sources added, for a deal value of $469 million.
Bank of America had no comment.
Buyers in the trade got a 1.3% discount to Starbucks' Thursday close. Banks running these so-called "block trades" typically offer the shares at a discount to where the stock had recently traded, in order to quickly lure buyers for a large chunk of stock, the Journal said.
The past 30 days, an average 3.1 million Starbucks shares have traded daily, according to FactSet.
The seller's identity and reason for selling weren't clear. Starbucks' shares are down 3.9% this year, versus a 7.6% gain for the S&P 500, the Journal noted.
TheStreet Ratings team rates STARBUCKS CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate STARBUCKS CORP (SBUX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 11.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 22.7% when compared to the same quarter one year prior, going from $417.80 million to $512.70 million.
- Net operating cash flow has increased to $850.10 million or 27.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.13%.
- The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SBUX's debt-to-equity ratio is low, the quick ratio, which is currently 0.62, displays a potential problem in covering short-term cash needs.
- STARBUCKS CORP has improved earnings per share by 21.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STARBUCKS CORP swung to a loss, reporting -$0.01 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus -$0.01).
- You can view the full analysis from the report here: SBUX Ratings Report