With the strength of this year's equities market, one major company that has not participated in the updraft is Starbucks Corp. (NASDAQ: SBUX). Actually, quite the opposite has happened as the shares have gone from about $36 down to the current price of $26.07. Down ten points has been disappointing, especially in a bull market, but I believe the time has come to re-examine this company and start buying the stock.

Starbucks operates on a fiscal year ending September 30. I estimate that for this year they will earn about $.87 per share, with September 2008 earnings at $1.07 per share. Commensurate revenues look like $9.5 billion this year and $11.4 billion next year. With the market capitalization at $19.3 billion, Starbucks is trading at less than two times next year's revenues. That's one buy signal, as growth companies tend to sell from three to five times forward revenues.

I recommended Starbucks last October to the members of my web site to buy at $29, and then I recommended a sell at $39 in December because the stock price got ahead of itself. I thought the shares could be repurchased in the low $30s sometime in the first half of this year. The stock is well-below that number to the mid $20s. What has happened to Starbucks is not too atypical of excellent long-term growth companies: they hit a small wall or detour along the way. Starbucks has been hampered by just okay same-store sales and rising dairy prices. Although it did not miss the March quarter expectations, it did not provide any upside to that quarter either. The froth came off the stock. The June quarter will more than likely come right in-line with consensus expectations of $2.4 billion of revenues and $.21 in earnings per share.