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The big moves in Green Mountain (GMCR -48%) and Chesapeake Energy (CHK +1.91%) recently have...

The big moves in Green Mountain (GMCR -48%) and Chesapeake Energy (CHK +1.91%) recently have value investors chomping at the bit to scoop up shares at deep discounts. To do so however, is akin to trying to catch a falling knife. "You have to distinguish between just setbacks and atrophy of business model,” says Short Hill Capital's Stephen Weiss. If you don't, you might just find yourself getting impaled by tempation. Some safer bets might be: Starbucks (SBUX -2%), Visa (V -4.6%), or McDonald's (MCD -0.6%).
Comments (16)
  • COS911
    , contributor
    Comments (43) | Send Message
     
    SBUX?! With a P/E of almost 33? With about 10% Y/Y growth; and people are questioning AAPL's value? Got to wonder what some people are smoking.
    3 May 2012, 03:22 PM Reply Like
  • gettinglong
    , contributor
    Comments (11) | Send Message
     
    I have drank both SBUX and GMCR coffees. SBUX did not agree with me and gave me a throbbing headache. Based on their products, I prefer GMCR.
    3 May 2012, 07:27 PM Reply Like
  • phemale60
    , contributor
    Comments (2776) | Send Message
     
    Try Starbucks Pike or Blonde --- super tasty! By the way, your pooch is darling.
    3 May 2012, 07:37 PM Reply Like
  • Gunseng
    , contributor
    Comments (8) | Send Message
     
    GMCR has some very clear issues with expiring patents and probably overstating their revenues, so dont expect the pain to end here. However for reasons you said above (better than starbucks coffee loaded with sugar) i think it has long-term potential. That being said it is risky, its at about fair value for once, but i wouldn't consider it until 10-15 per share. Its rare for a stock to crash like that and not eventually careen well below fair value.
    8 May 2012, 08:08 PM Reply Like
  • phemale60
    , contributor
    Comments (2776) | Send Message
     
    Gunseng, you can get Starbucks coffee without sugar! I suppose those concoctions with whipped cream and long Italian names are sweetened. When I go for a coffee from my local Starbucks, I just go for plain old regular coffee, perhaps a "tall Pike" or "tall Blonde" --- and I shoot some milk and a packet of Stevia in there! Great!
    8 May 2012, 09:52 PM Reply Like
  • stopthe
    , contributor
    Comments (105) | Send Message
     
    GMCR just went on sale. Time to buy. P/E compared to its sector is very low.
    3 May 2012, 03:55 PM Reply Like
  • Gatesh
    , contributor
    Comments (25) | Send Message
     
    Actually the word is "champing".
    3 May 2012, 09:00 PM Reply Like
  • josephk3
    , contributor
    Comments (13) | Send Message
     
    SBUX is unbeatable in this
    sector. Great coffee, very pleasant stores sprouting all over the world. Considering that coffee is an addiction, like any other drug. It is unstoppable. I see green all over.
    4 May 2012, 04:17 AM Reply Like
  • Zheeeem
    , contributor
    Comments (259) | Send Message
     
    SBUX = international growth play. It's not just the coffee, it's the culture. And SBUX has extremely strong customer loyalty to build from.
    4 May 2012, 04:50 AM Reply Like
  • bakkbakk
    , contributor
    Comments (280) | Send Message
     
    30% off all keurig machines commercial just seen 30 minutes ago. Last time i checked taking a 1/3 off your price does not signal demand nor does it help fund future capex. ok ok its a mothers day sale but 30% off? If you base your decisions on the p/e compared to others in the sector you are missing many problems with this company.
    Lower demand-higher inventory-sales on products-questionable theories of their business tactics-continuous negative cash flows with unexplained capex allocations-patent cliff- kcup competition(splitting kcup sales with their partners)-lower guidance-CHEAP GETS CHEAPER

     

    don't waste your money!
    6 May 2012, 06:45 PM Reply Like
  • phemale60
    , contributor
    Comments (2776) | Send Message
     
    Today on Fidelity I saw this Reuters piece. It was way too long so I only pasted part (had trouble pasting the link). Starbucks is mentioned will be affected.

     

    Guatemala's coffee crop hit by killer fungus

     

    BY Reuters
    — 12:48 PM ET 05/08/2012
    * Fungus affects up to 40 pct of Guatemala's coffee trees

     

    * Outbreak cuts harvest forecast

     

    * More aggressive variety threatens farmers

     

    By Mike McDonald

     

    GUATEMALA CITY, May 8 (Reuters) - A mutant strain of one of the world's most devastating coffee diseases is attacking crops in Guatemala, putting farmers on high alert for a wider outbreak across Central America.

     

    Growers are battling a new form of leaf rust fungus, or roya, which kills leaves on coffee trees and makes the weakened plants produce less.

     

    Leaf rust usually infects coffee grown at lower altitudes where it is hotter and wetter, conditions in which the fungus thrives, but a new type is creeping up to higher, cooler areas.

     

    That is a big worry for gourmet coffee roasters who rely on arabica coffee grown in the mountains or on slopes of steep volcanoes. Together, Central America and Mexico produce around a fifth of the world's arabica, a higher-quality variety favored by most top-end roasters such as Starbucks (http://bit.ly/Jetfog).
    8 May 2012, 09:58 PM Reply Like
  • bakkbakk
    , contributor
    Comments (280) | Send Message
     
    better switch to tea. Oh that's right, gmcr said people don't drink tea whan it's warm out. I did not listen to sbux conference call but wasn't one of their issues being hedged at a current price of coffee while prices were dropping? Since they are hedged, and this could cause prices to go up, it would be sort of bullish for sbux in comparison, or at least wont affect their prices in the near future.

     

    Unless it wrecks the whole tree then it will be bad for all because they take a few years to grow to be harvested.
    Someone better give mike mcdonald a call and tell him sbux is hedged, unless crisis voids all hedging......
    8 May 2012, 10:23 PM Reply Like
  • phemale60
    , contributor
    Comments (2776) | Send Message
     
    Starbucks has some popular teas, and iced teas in summer. Maybe they will expand their tea varieties. Also, didn't they decide to begin selling juices? Thought that was the next addition. The Sbucks stores in my area are popular as a place to hang out with lap top (free Wi Fi), and people sit and read, or chat. Like a bar without liquor or coffee house without jazz/poetry! Nice atmosphere.

     

    I first bought it a few weeks ago before the earnings and it's been declining ever since (story of my life!) -- sold the portion losing me money and keeping some losing me less. Hope to buy more when it simmers down.
    9 May 2012, 02:24 PM Reply Like
  • rcpatrick5443
    , contributor
    Comments (678) | Send Message
     
    It's "champing at the bit."
    10 May 2012, 02:38 AM Reply Like
  • chopchop0
    , contributor
    Comments (3138) | Send Message
     
    V is the type of company and industry that defines "moat" Owning one of the few financial tollbooths in the world is a good business to be in.
    16 May 2012, 11:15 AM Reply Like
  • Snoopy1
    , contributor
    Comments (1105) | Send Message
     
    V is a good tollbooth business and is worth buying on pullbacks.

     

    However, I am a little worried about mobile payments - will AAPL eventually take a portion of all mobile payments like they take half of all search revenue when google is used on iOS devices or their 30% cut of music sales on iTunes?

     

    Buying at a good valuation is the best defense against these uncertain risks.
    16 May 2012, 01:09 PM Reply Like
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