We recently published a list of Top 10 Stocks Wall Street is Discussing. In this article, we are going to take a look at where Starbucks Corporation (NASDAQ:SBUX) stands against other top stocks Wall Street is discussing.
Bill Strazzullo, Bell Curve Trading chief market strategist, said in a latest program on CNBC that the market rally that started during the peak of the pandemic driven by fiscal stimulus seems to have “tapped out.” The analyst sees more pain ahead:
“The bottom line of all this is that we’ve only started this. We’ll be lucky if we get out of this top to bottom only down 20%. I think eventually, across the indices—Dow, S&P, NASDAQ 100—we’ll end up being down 25% before it’s all done.”
Asked what he would advise to long-term investors, the analyst recommended taking some money off the table and bracing for more impact:
“It’s not anything very esoteric. Take some money off the table—you’ll be able to deploy that capital at much better levels later in the year. But right now, Trump is taking us not only into a trade war but into a full-blown recession. I think the mistake people are making is that we’ve been spoiled with these V bottoms—we go down 10 or 12% and then right back up. This is not going to be like that. We are going to be in for a much deeper drawdown and I think something that’s going to last a significant amount of time.”
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For this article, we picked 10 stocks making moves on important news. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A barista pouring freshly brewed coffee from an espresso machine to a cup in a bustling cafe.
Starbucks Corp (NASDAQ:SBUX)
Number of Hedge Funds Investors: 76
Josh Brown, CEO of Ritholtz Wealth Management, said in a recent program on CNBC:
“Starbucks Corp (NASDAQ:SBUX) right now has an incredible setup. Obviously, I like the fundamentals here, but just purely from a technical standpoint, this thing looks coiled, and I think the next move is a break above. Back in May of 2023, which is almost two full years ago, is when this chart peaked out, and it peaked below the prior highs set back in 2021. It failed and spent almost two full years consolidating. Now we could be off to the races. The stock is up 24% year to date. It is the sixth-best performing stock in the S&P 500 this year. Just reported a kitchen-sink quarter.”
The Street is turning bullish on SBUX amid its new CEO Brian Niccol. Why? He has a solid history of turning around businesses. Bill Ackman brought Niccol to Chipotle Mexican Grill from Yum! Brands to turn the company around. Ackman sold his stake in Chipotle in the second quarter of 2024, just before Niccol transitioned to Starbucks. During Niccol’s tenure, Chipotle shares rose 700%.
Invesco Growth and Income Fund stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q3 2024 investor letter:
“Starbucks Corporation (NASDAQ:SBUX): The coffee retailer has struggled with China’s economic softness, declining sales and weaker US store traffic that have hampered revenues and profit margins. However, we believe the company has several positive, long-term catalysts, including strong growth in store count, better labor relations, improving productivity from labor, technology and innovation, and easier future earnings comparisons. We believed a management change was imminent, and shortly after we purchased the stock, Starbucks named a new CEO, which was seemingly greeted enthusiastically by investors.”
Overall, SBUX ranks 4th on our list of top stocks Wall Street is discussing. While we acknowledge the potential of SBUX, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SBUX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.