Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice! As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisers prior to making any investment decisions based on information on this website.
A few moments ago I exercised my discretion in selling stocks based on fundamental changes in information available. I sold my 50 shares of Starbucks (SBUX) in my trading account at $27.00/share. It has been a great stock for me having purchased shares originally at a cost basis of $11.40/share on 1/24/03, slightly before starting this blog. Thus this represented a gain of $15.60 on these shares or 136.8% since their original purchase. This was the seventh sale of shares since my purchase, having sold shares at the 30, 60, 90, 120, 180, and 240% level. Sticking just with my own trading system, a sale of shares would have been triggered at the 120% gain point, so I pulled the plug on these shares a bit earlier than required.
What concerned me was the downgrade by Andrew Barish to a "sell" on SBUX. His comment:
"Although we believe that the company controls a very strong brand and can continue to grow, we believe the pace of growth will be slower (with international business still too small to make significant contribution to operating profits, and could be several years away from such a contribution), and that expectations are too high for a short-term recovery," Barish wrote in a note to clients."
I also went back and reviewed the 3rd quarter results which came in at the low end of their own estimates. The critical number that I like to review in retail stocks is the 'same store sales' growth. Apparently, as noted in the story, "...the number of purchases at U.S. locations grew less than 1% in the fiscal third quarter." Outside of the United States, growth was at 5%, better than domestically, but still somewhat less than dynamic. Comments about rising gas prices and other economic pressures didn't really reassure me. Fortunately, they matched expectations for $.21/share.
STARBUCKS (SBUX) IS RATED A SELL
And I sold my shares. Now the big question is whether this sale with a large gain entitles me to replace this position. I am going to vote "yes". I guess I am the master of my own ship. Since the stock didn't get sold for a price decline reason, and I actually had a greater than 100% gain, it isn't really a truly 'bad news' situation. Sort of lukewarm I guess.
Anyhow, I am going to see if I can add a new position with a bit more pizzazz. (It is really a word!)
Thanks again for visiting! If you have any comments or questions, please feel free to leave them on the blog or email me at firstname.lastname@example.org. If you get a chance, drop by my Stock Picks Podcast Website, visit my Covestor Page where my trading account is evaluated, and my SocialPicks Page where all of my 'picks' are tracked...starting sometime since January, 2007.
Finally, thanks for those people who signed up with Prosper.com....let me know what you think. (Full disclosure, I do receive a small referral fee if you do sign up with them.) It is an interesting website with person-to-person lending set up by the E-Loan founder.
Have a great day trading and I shall keep you posted if I find anything of interest that I wish to substitute for my Starbucks stock.