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Turnaround time for Starbucks (SBUX)?

"I've spotted an excellent opportunity to cash in on the turnaround of one of America's most visible companies -- Starbucks (NASDAQ: SBUX)," says Jim Stanton.

The quantitative analyst and contributing editor to Xcelerated Profits Report explains, "I've had my eye on a number of retail stocks for some time now, looking for signs of a potential turnaround, and Starbucks is now high on my list."

"One of the main reasons for the slide in SBUX shares from its high of $40 in November 2006 was the overly aggressive expansion plan.

"And as food and dairy prices have soared, this has led to higher operating costs. In turn, this forced Starbucks to raise prices, just as consumers were struggling from the housing slump and soaring inflation.

"And as competition from the likes of McDonalds and Dunkin Donuts has turned up the heat, Starbucks has suffered charges related to closing out unprofitable stores. But Starbucks is tackling the problems.

Continue reading Turnaround time for Starbucks (SBUX)?

Yum! Brands (YUM): 'World class leadership'

"I think now is a particularly opportune time to buy the world's largest fast-food company, YUM! Brands (NYSE: YUM) ," says Louis Basenese.

The associate investment director and contributing editor to The Oxford Club observes, "YUM Brands operates 35,000 restaurants under the KFC, Taco Bell and Pizza Hut brands." Here's his review of the firm's outlook, including its expanding role in China.

"For starters, YUM keeps extending its streak of impressive results. For the seventh quarter in a row it beat expectations. Earnings per share increased 16% for the quarter and 28% year-to-date. Not to be overlooked either is the fact YUM raised guidance. Again.

"This quarter, fewer than 5% of companies in the S&P 500 can boast this triple whammy (beating earnings and revenue estimates and raising guidance). Ironically, while most of the other triple-whammy stocks enjoyed hefty single- and double-digit run-ups on the announcements, YUM sold off.

"And here's where I think most investors are missing the boat, and once again focusing too heavily on the short term. Yes, YUM's in a pinch. Food costs are rising and consumers are spending less.

Continue reading Yum! Brands (YUM): 'World class leadership'

CEO invests $10 million at PepsiAmericas (PAS)

"With its CEO recently buying $10 million of shares, PepsiAmericas Inc. (NYSE: PAS) has to be considered one of the most credible Insider stories in quite some time," notes Jack Adamo.

Here, in his Insiders Plus newsletter, the advisor -- who specializes in assessing situations in which corporate insiders are purchasing stock -- he looks at the world's second-largest Pepsi bottler.

"When I was a kid, a Pepsi was a dime; today, it's about $1.50 for the same size bottle. So, forgive me if I laugh myself silly when analysts say Pepsi bottlers are in trouble due to cost inflation.

"The price of the product has gone up at a compound annual rate of 5.6% per year for 50 years. Is this year going to kill it? I think not. Nor does CEO, Rober Pohlad whose recent purchase was done through a family-owned holding company.

"It was not a huge buy in relation to his holdings -- it increased his stake in the company from 9.6% to 9.9% -- but $10 million is $10 million. Do that a few times, and pretty soon it starts adding up to real money. (Sorry, couldn't resist.)

"The stock has fallen this year from $36 to $26, which is about where he made his recent buys. After a blowout 2007, the company guided down expectations for 2008, citing economic weakness. The stock quickly tanked.

Continue reading CEO invests $10 million at PepsiAmericas (PAS)

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Symbol Lookup
IndexesChangePrice
DJIA-74.9212,454.83
NASDAQ-1.852,837.53
S&P 500-2.861,317.82

Last updated: May 27, 2012: 09:35 PM

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