Madison Investments, an investment advisor, released its “Madison Investors Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Class Y) fell by 1.03% compared to a 4.28% return for the S&P 500 index. YTD the fund returned 8.50% compared to a 15.29% return for the index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Madison Investors Fund highlighted stocks like Starbucks Corporation (NASDAQ:SBUX) in the second quarter 2024 investor letter. Starbucks Corporation (NASDAQ:SBUX) operates as a roaster, marketer, and retailer of coffee. The one-month return of Starbucks Corporation (NASDAQ:SBUX) was -6.94%, and its shares lost 26.46% of their value over the last 52 weeks. On July 18, 2024, Starbucks Corporation (NASDAQ:SBUX) stock closed at $74.19 per share with a market capitalization of $84.035 billion.
Madison Investors Fund stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q2 2024 investor letter:
“We purchased shares in Starbucks Corporation and Deere & Company. Starbucks Corporation (NASDAQ:SBUX) is a global specialty coffee chain with an iconic brand that resonates with consumers around the world. Its loyalty rewards program is a true differentiator, with its unmatched scale (nearly 33 million members in the U.S. alone), and convenient mobile ordering and customization capabilities.
The company has struggled over the last handful of years due to the pandemic shut-downs, the lingering traffic declines from workers no longer commuting to city centers, intensifying competition in China, and inflation in wages, freight, and packaging. But its biggest challenge is actually one of its own making. It’s a victim of its own success.
Over the last decade it has led the industry in shifting its business mix from hot beverages to cold beverages, and from in-store purchases to the use of mobile ordering and drive-thrus. These shifts have been hugely beneficial to Starbucks, intensifying customer loyalty, raising the frequency of purchases, appealing to younger consumers, and raising average selling prices. Yet, these benefits came at a very high price. The speed at which these shifts occurred left Starbucks management unprepared to handle the increase in operational complexity and customer expectations of faster service. The result was a noticeable decline in both customer experience and store employee satisfaction…” (Click here to read the full text)
A barista pouring freshly brewed coffee from an espresso machine to a cup in a bustling cafe.
Starbucks Corporation (NASDAQ:SBUX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 69 hedge fund portfolios held Starbucks Corporation (NASDAQ:SBUX) at the end of the first quarter which was 59 in the previous quarter. Starbucks Corporation’s (NASDAQ:SBUX) fiscal second-quarter performance fell short of expectations. The company reported $8.6 billion in revenues for the quarter, a decrease of 1% year-over-year. While we acknowledge the potential of Starbucks Corporation (NASDAQ:SBUX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Starbucks Corporation (NASDAQ:SBUX) and shared the list of top dividend stocks to buy in 2024 according to Billionaire Paul Tudor Jones. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.