We recently published a list of Top 10 Stocks to Buy According to Balyasny Asset Management. In this article, we are going to take a look at where Starbucks Corporation (NASDAQ:SBUX) stands against other top stocks to buy according to Balyasny Asset Management.
Balyasny Asset Management (BAM) is a leading investment management firm headquartered in Chicago, with additional offices in Canada, London, and Asia. The firm is dedicated to delivering consistent, uncorrelated returns across various market conditions. By leveraging advanced research, technology, and a diversified investment approach, BAM seeks to identify and capitalize on opportunities in global financial markets. The firm’s core strategies span equities, fixed income, macroeconomic trends, commodities, and systematic investing, all supported by a robust risk management framework tailored to individual portfolio managers and their teams.
The firm’s Quantitative Research division employs an evidence-based, analytical approach to enhance investment performance. By identifying patterns and inefficiencies, the team supports portfolio managers in making data-driven decisions that lead to sustainable returns. BAM’s Applied AI team further strengthens this effort by integrating artificial intelligence tools into daily operations, improving efficiency, and uncovering insights that might otherwise go unnoticed. This collaboration across strategies enhances idea generation while mitigating risks, ensuring that investment decisions are well-informed and adaptive to evolving market conditions.
Balyasny’s investment strategies are diverse, with a strong emphasis on Equities Long/Short (L/S), one of the largest equity platforms among multi-strategy asset managers. The firm employs over 300 analysts and 70 portfolio managers who conduct fundamental, sector-specific research to identify compelling long and short investment opportunities. Its Fixed Income & Macro division capitalizes on global trends through a mix of directional, relative value, and semi-systematic strategies, supported by a team of more than 140 investment professionals across 40 specialist groups. Additionally, the Commodities division focuses on supply and demand-driven investments, leveraging a sophisticated technology and data platform.
Other key investment approaches include Multi-Asset Arbitrage, which targets opportunities in event-driven and arbitrage strategies such as convertibles and credit, and the Systematic division, which uses proprietary technology and quantitative modeling to generate consistent, risk-adjusted returns. BAM’s forward-looking risk management system plays a crucial role in safeguarding investments, adapting to market changes, and ensuring risk is managed effectively across asset classes. By continuously refining its strategies and leveraging cutting-edge technology, Balyasny Asset Management remains a competitive force in the global investment landscape.
Dmitry Balyasny co-founded Balyasny Asset Management (BAM) in 2001 and serves as its Managing Partner and Chief Investment Officer. Under his leadership, BAM has grown into a globally recognized investment firm with a strong presence in equities long/short investing. He plays an active role in risk management and portfolio strategy while overseeing the firm’s expansion across multiple asset classes. Balyasny began his trading career in 1994 with Schonfeld Securities and has been a key figure in the hedge fund industry since 1999. His expertise in identifying overlooked investment opportunities has been instrumental in BAM’s success, emphasizing a research-driven approach to uncovering unique, high-return strategies.
Beyond his work in finance, Balyasny is deeply committed to philanthropy and education. In 2021, he founded ATLAS Fellows, Inc., a nonprofit dedicated to providing under-resourced young individuals with opportunities for careers in finance and investing. Additionally, he actively supports the Ayn Rand Institute and various educational initiatives aimed at fostering intellectual and professional development. As a board member for Teach for America Chicago, he contributes to advancing educational equity and supporting community engagement programs.
Balyasny holds a Bachelor of Business Administration in Finance from Loyola University Chicago. His philosophy in investing is centered on focusing on “misunderstood situations,” leveraging in-depth research to uncover opportunities others may overlook. This contrarian yet disciplined approach has solidified his reputation as a leading figure in the investment industry.
Once an unknown name in the financial sector, Dmitry Balyasny has since risen to prominence as one of the industry’s top investors. His ability to navigate complex markets and adapt to changing economic conditions has made him a respected voice in the hedge fund world. Through his leadership at BAM and his philanthropic efforts, he continues to influence both the financial and educational landscapes, leaving a lasting impact on the industry and beyond.
As of its latest filing for the fourth quarter of 2024, Balyasny Asset Management oversees approximately $67.14 billion in 13F securities. The firm maintains a well-diversified portfolio, with its top ten holdings representing just 6.13% of total assets, reflecting a balanced investment approach that mitigates risk while capitalizing on strategic opportunities.
Our Methodology
The stocks discussed below were picked from Balyasny Asset Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 a freshly brewed cup of coffee from a high-end espresso machine.
Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders as of Q4: 84
Balyasny Asset Management’s Equity Stake: $330.27 Million
Starbucks Corporation (NASDAQ:SBUX), founded in 1971 and headquartered in Seattle, Washington, is a global coffeehouse chain known for its premium coffee, tea, and food offerings. The company generates revenue through a combination of company-operated and licensed stores, as well as through brand licensing, allowing third-party businesses such as hotels and airlines to serve its products. The company also distributes its packaged coffee beans, teas, and other food items to retail outlets.
In its financial report for the first quarter of the 2024 fiscal year, Starbucks Corporation (NASDAQ:SBUX) announced a 4% decline in global comparable store sales, driven by a 6% drop in transactions, which was partially offset by a 3% increase in the average amount a customer spends per transaction, known as ticket size. The company’s international markets experienced a similar trend, with comparable store sales dropping 4%, including a 6% decline in China. Despite these setbacks, Starbucks Corporation (NASDAQ:SBUX) continued its expansion, opening 377 net new stores during the quarter, bringing its global store count to 40,576.
Financially, Starbucks Corporation (NASDAQ:SBUX) reported consolidated net revenues of $9.4 billion for the quarter, remaining flat compared to the previous year. Operating margin declined by 390 basis points year-over-year to 11.9%, mainly due to increased labor costs, additional benefits for employees, and the elimination of extra charges for non-dairy milk. These expenses were partly offset by pricing adjustments and supply chain efficiencies. Earnings per share fell by 23% to $0.69 compared to the prior year. Meanwhile, the Starbucks Rewards program continued to show resilience, with active U.S. members increasing by 1% year-over-year to 34.6 million.
Despite the challenges, Starbucks executives remain optimistic about the company’s turnaround strategy, known as “Back to Starbucks.” CEO Brian Niccol emphasized that early efforts have received a positive response and that the company is committed to making fundamental changes to restore confidence and drive long-term growth. The company’s leadership is confident that these strategic initiatives will position Starbucks for a stronger financial future.
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 10th on our list of top stocks to buy according to Balyasny Asset Management. While we acknowledge the potential for SBUX as an investment, our conviction lies in the belief that some 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
