Starbucks Throws in the Towel
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In a sign of the times, the mighty Starbucks (NASDAQ: SBUX) is in retreat. The iconic coffee company will be closing 600 U.S. stores and laying off as many as 12,000 employees.
Starbucks is still growing outside the United States. But that growth is badly needed to justify the share price. Even after a drop of 66% from the 2006 highs, SBUX still sports a lofty growth multiple. If you buy shares at the present level, you’ll be paying nearly 27 times earnings for projected revenues over the next year.
So is Starbucks a short if it’s not a clear buy? Probably not. These days it’s more of a morality tale.
Back in 2006, when SBUX hit its all-time highs, the company could do no wrong. The time to go short was when all of Wall Street was cheering…. and when the growth multiple was even more out of whack than it is today.
Justice Litle
Editorial Director, Taipan Publishing Group
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Source: Starbucks Throws in the Towel
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Tags: Justice Litle, SBUX, US Jobless RateAbout the Author
Justice Litle, Executive Editor for the Taipan Publishing Group and of the Free E-letter, Taipan Daily, has a unique background that has served him well in the markets. Originally pursuing a PhD and a life in academia, his career path changed forever after discovering The Investment Biker, Jim Rogers chronicle of macro investing by way of motorcycle.

Taipan Daily is your free resource for late-breaking investment opportunities to help you beat Wall Street to the profits. Filled with investment analysis and insight from every sector. Taipan Daily delivers just the right blend of safe opportunities with the fast-moving plays, so you have an insider's edge over Wall Street and other investors.

