Not Everything At Starbucks Is Savory

| About: Starbucks Corporation (SBUX)

From the title, you may probably believe that I don't like Starbucks (NASDAQ:SBUX).

I don't, but I'm reminded of the very meaningful expression "hate the sin and not the sinner."

I've only used that expression one other time in my life, as my people's piety stopped evolving more than two millennia ago and failed to get that memo. But a few years ago we were hosting an inner city child in our home. One night he found some spray paint and adorned the side of our home with some 5th grade literary prose that extolled his prowess with the opposite sex.

He understood the expression, as I used it to express my dissatisfaction.

And then there's Starbucks.

I don't like their coffee. It makes my heart race and makes me even more annoying than I usually am, especially in social situations. My wife is a self-professed coffee snob and until she got me the gift she always wanted for my birthday, a Nespresso coffee machine, we always had either Starbucks or Peet's (NASDAQ:PEET) in the house, which I occasionally would adulterate with Chock Full of Nuts, to her total cluelessness.

Howard Schultz, CEO/chairman is one of only a handful of those that can boast of restoring the magic to a company that he helped to found, subsequently stepped down as CEO and then returned to resolve crises. Had he known of my adultery, I have no doubt that litigation would have been in my past. If he reads Seeking Alpha, it may yet be in my future.

Ted Waite? Remember him from Gateway Computer? Jerry Yang of Yahoo! (NASDAQ:YHOO). Michael Dell? It's hard to go back home, but Steve Jobs and Howard Shultz were able to pull it off, whereas most cannot.

And certainly, if you listened to Howard Schultz's defense of the market reaction to the most recent earnings report in which shares got absolutely hammered, after running up 4% immediately before earnings, you had to be inspired. He was absolutely confident in the real meaning of the numbers and discounted the various spins and negativism better than I've ever heard a CEO do under trying circumstances.

You also have to hand it to Schultz and his team for the way in which they manage controversy, whether it be around using crushed insects to provide an appealing red color to products or allowing the horrific nutrition data leave its image and shares unaffected. Obviously, you also have to admire the success of the pricing strategy and the ability to expand, yet not cannibalize.

To a large degree, Starbucks, as a company subject to the public eye is very similar to Apple (NASDAQ:AAPL) in what might be potentially upsetting news, becomes inconsequential. Does anyone really express umbrage and outrage upon learning that Apple Store employees were only being paid minimum wage? If you believe in the "Intelligence Quotient to Hourly Salary Metric," then the "Geniuses" are patently and inappropriately compensated. Try getting away with that at one of the new Microsoft (NASDAQ:MSFT) stores and you would start waves of moral outrage.

But, and there's always a but.

In the case of Starbucks, as for so many other things, hate is a strong word, but excuse me for continuing to use it, rather than to look for something less graphic.

I'm more inclined to love the sin and not be so crazy about the sinner.

Howard Schultz has had an interesting year, at least with regard to his association with some other publicly traded companies. I don't think I like the man very much anymore.

I've written previously about my dysfunctional love affair with Green Mountain Coffee Roasters (NASDAQ:GMCR) and documented a long term series of trades that provided much needed cushions as a flawed, very flawed company, came increasingly under scrutiny and price pressure.

What Green Mountain didn't need was any help in eroding its own credibility and stock value, but I think Starbucks' agreements with Green Mountain and their more than passive aggressive competitive stance with its products and devices undermined what little credibility Green Mountain maintained. Certainly to its share detriment. Additionally, the typically forceful and convincing Schultz always minimized, downplayed and shifted his effusive comments to low gear whenever questioned about the Starbucks - Green Mountain relationship, additionally eroding credibility. He gave new meaning to the expression "Killing them Softly."

Then there's Groupon (NASDAQ:GRPN). Schultz's sudden departure from the Board of Directors was recently described as "planned," in that he was only planning to stay for only a single year. Strange that at the time of the departure that kind of information was not provided, as opposed to the "no comment" response that was provided by all in the know, including Howard Schultz.

Of course, when Starbucks announced an alliance with Square for point of service transactions at its locations, that may have been a little bit of a slap in the face to Groupon, which was seeking to evolve its flailing business core into that growing area.

So you don't need friends like Howard Schultz, unless you're an investor.

As I learned a long time ago, business is business and friendship is friendship.

As a stock, how can you not love Starbucks, while feeling conflicted about Schultz? I don't see the difference between investing in Altria (NYSE:MO) and its products killing people, except that Schultz has not been linked to any deaths.

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While I like categorizing stocks that I offer for consideration in weekly postings as being either "Traditional, Momentum or Double Dip Dividend," Starbucks both transcends and spans those categories. While it is certainly a solid company with real products, real cash and real prospects, it also is fully capable of large price moves on news, witness the response after recent earnings were announced.

But Starbucks is truly one of the rare "triple threats" out there. In my former life, a triple threat was someone who was recognized for excellence in patient care, teaching and research. A rare entity, at best. In stocks, I think of triple threats as being great companies with great option premiums and dividend yields. Granted, the dividend yield could stand some improvement from its current 1.4%, but who would turn it down?

At the moment, with its shares closing the week (August 17, 2012) at $48.22, selling a $48 August 24, 2012 call would yield a 1.0% ROI, while the monthly call would yield 2.9%, while still offering 0.5% downside protection. In a given week or month if the S&P 500 went up by a similar amount, most people would be ecstatic.

This past Friday saw my shares of Starbucks get assigned, as had the prior week. However, despite the fact that I rarely will chase assigned stocks and buy them back at higher prices, most often instead waiting for price retracements, I'm prepared to do a little chasing for shares this week.

Maybe its the caffeine that's making me so agitated. maybe I've become silently addicted, but this is one sinful stock that I would love to create a place for in my portfolio even while still having a distaste for the sinner.

Disclosure: I am long GRPN.

Additional disclosure: I may re-initiate a position in SBUX