Is Starbucks a Hot Stock?

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With shares of Starbucks (NASDAQ:SBUX) trading around $76, is SBUX an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Starbucks is a roaster, marketer, and retailer of coffee operating worldwide. The company purchases and roasts the coffees it sells along with handcrafted tea and other beverages, as well as a variety of fresh food items through its stores. Starbucks sells a variety of coffee and tea products and licenses its trademarks through other channels like stores and national food service accounts. In addition to its flagship Starbucks brand, the company’s portfolio features Tazo Tea, Seattle’s Best Coffee, Starbucks VIA Ready Brew, Starbucks Refreshers beverages, and the Verismo System by Starbucks. Starbucks has developed a solid reputation over the past several years, which has generated a lot of buzz for its products.

Starbuck is partnering with Oprah Winfrey to push its tea sales — because if anyone can make tea happen, Oprah can. The media mogul and the CEO of the world’s largest coffee chain clinked cups at the company’s annual meeting on Wednesday, Reuters reported, and it was there that Starbucks announced it will debut a new tea-based drink created by Winfrey called “Oprah Chai.” The new brew will go on sale at Starbucks and Teavana stores in the U.S. and Canada on April 29.

Fans of Winfrey know that she is a tea enthusiast, and Starbucks chose to partner up with the celebrity and have her brew her own brew. According to Reuters, the Seattle-based chain is looking to push its tea offerings now that the coffee market is so saturated, and it sees no better way to do it than to enlist Winfrey for its team. The celebrity developed her tea with Teavana’s teaologist Naoko Tsunoda and Reuters reports that it is a blend of tea infused with cinnamon, ginger, cardamom, and cloves. It will be sold in tins or as prepared tea lattes.

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