Starbucks set another all time high yesterday of 52.46. Shares are up nearly 27% so far in 2015. So the question remains, is it too late to get in on this trade. The simple answer no. Here is why.
The company has decent fundementals to stand on:
-A strong presence around the globe
-An excellent, high quality loyalty program
-Digital offerings (Apps for Iphone/Android, Mobile Order and Pay)
Starbucks Mobile order and Pay which the company launched in mid-March of this year is of particular interest to me and should be of interest to all investors. The feature allows customers to place an order in advance and pick it up at their selected Starbucks location. It is now available in over 650 stores in Washington, Idaho, Oregon and Alaska. This new feature, in my opinion is a definate game changer for Starbucks because it takes out the inconvenience of waiting, and has the potential to increase its sell-through. Imagine when this is in thousands of stores.
The coffee giant also made moves globally that broadened its empire even further across the Pacific. Back at Starbucks' investor day in December, the company said that it was expecting its revenues to almost double within the next five years. The key to this doubling is a specific focus on unlocking untapped opportunities across the company's China and Asia-Pacific region. Obviously, the future growth is likely to come from international markets.
Starbucks completed the first step of its tender offer to acquire Starbucks Japan in the first quarter of fiscal 2015. The company obtained control of the remaining public shares during this quarter, bringing total ownership to 100%. This is the first step to further unlocking value in this region.
In terms of China, Starbucks and Chinese leading food and beverage producer Tingyi Holding announced in March that they have entered into an agreement to manufacture and expand the distribution of Starbucks ready-to-drink (RTD) products throughout mainland China. This is a $6 billion RTD coffee category.
Disclosure: The author is long SBUX.