Cramer thinks Starbucks is a buy
On July - 27 - 2009
Cramer thinks Starbucks will be a comeback story, similar to McDonald’s in 2003, especially since a new group of value investors are interested in the leading coffee chain. With the return of CEO Howard Schultz, Starbucks has cut costs dramatically by closing 800 stores and reducing expenses. These savings accounted for the company’s earnings beat, in spite of a 6% reduction in same store sales domestically. Starbucks is redesigning stores to fit the atmosphere of local neighborhoods, is introducing healthier offerings, cheaper coffee and may reinvent instant coffee with its VIA product. Cramer thinks Starbucks, trading at 19.5% 2010 earnings with a 18% growth rate, is a buy.
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