Is Starbucks Corporation (SBUX) A Good Stock To Buy?

At the end of February 2016, Starbucks Corporation (NASDAQ:SBUX) announced its plans to open the first Starbucks store in Italy in early 2017. Italy is the fourth-largest economy on the European continent and represents a key market for Starbucks, especially considering the country’s strong affinity for coffee. Although the Italian coffee culture is exclusive and unique, Starbucks may be very appealing among young customers accustomed with the brand. It remains to see how the country of coffee will greet the widely-known Starbucks brand, but this movie shows that Starbucks is ready for the challenges and well-prepared to establish its brand in this country despite facing enormous competition.

How have hedgies been trading Starbucks Corporation (NASDAQ:SBUX)?

Heading into 2016, a total of 61 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 13% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in Starbucks Corporation (NASDAQ:SBUX). Arrowstreet Capital has a $430.9 million position in the stock, comprising 2% of its 13F portfolio. Coming in second is Columbus Circle Investors holding a $209.9 million position; 1.7% of its 13F portfolio is allocated to the stock. Other peers that hold long positions consist of Phill Gross and Robert Atchinson’s Adage Capital Management, John Burbank’s Passport Capital and Jim Simons’s Renaissance Technologies.

Consequently, key hedge funds have jumped into Starbucks Corporation (NASDAQ:SBUX) headfirst. Jim Simons’ Renaissance Technologies established the most outsized position in Starbucks Corporation (NASDAQ:SBUX). Renaissance Technologies had $83.2 million invested in the company at the end of the fourth quarter. Israel Englander’s Millennium Management also made a $49.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Gregory Thomas’s Carbonado Capital, and Solomon Kumin’s Folger Hill Asset Management.

In the final page of this article, we discuss the hedge fund activity in several other companies that have market capitalizations similar to the one of Starbucks.