5 Best Coffee Stocks to Invest In

2. Starbucks Corporation (NASDAQ:SBUX)

Number of Hedge Fund Holders: 60

Starbucks Corporation (NASDAQ:SBUX) ranks 2nd in our list of the best coffee stocks to buy according to hedge funds. Earlier this month Starbucks Corporation (NASDAQ:SBUX) posted fiscal Q4 results. Adjusted EPS in the quarter came in at $1.06, beating estimates by $0.09. Revenue in the quarter jumped about 11.4% year over year to $9.37 billion, beating estimates by $90 million.

ClearBridge Multi Cap Growth Strategy made the following comment about Starbucks Corporation (NASDAQ:SBUX) in its Q2 2023 investor letter:

“Top heavy leadership has overshadowed weakness across much of the equity market. We took advantage of the narrow breadth in the second quarter to increase our exposure to the consumer discretionary sector with two purchases that further enhance portfolio diversification and should help support consistent performance through a full cycle.

Starbucks Corporation (NASDAQ:SBUX) is the leading provider of specialty coffee beverages, operating close to 19,000 global stores primarily in North America, China and Japan and 37,000 licensed partner locations. We view Starbucks as a quality compounder with strong free cash flow, operating in a segment and in dayparts that are very much routine-based and habitual, balancing the business’s exposure to discretionary spending. Additionally, Starbucks is still in the early stages of its reinvention plan to help accelerate revenue growth over the next several years on the back of better same store sales and unit growth. Coupled with the benefits of margin expansion, we believe the company can drive double-digit EPS growth at scale.”