Monday, October 8, 2012

"Buckle up your chin strap and grab a stock that has a little grit and can tough it out"

Dow Jones Industrial Average 13,610.15 (UP) Week ending 10-05-2012

Starbucks Corp. (symbol SBUX, $48.74) 
 Return on Equity - 28.81%     PEG Ratio - 1.21

When you get into October, and the skies start getting grey and the days start getting shorter, you need to be like those guys in the NFL and buckle up the chin strap and get those players on your team that are going to help you to have a winning game and portfolio.

 Starbucks is that steady quality player that you need. It meets our new tenet of "Return on Equity of 15+% and a PEG Ratio of less than 1.50". SBUX has a One year Total return of 19.61% and a 3 Year Total Return of 146.35%. (All stats. from

The company has 5 year earnings growth of 17.06% and pays a small 1.39% dividend. Starbucks Corp. is the premier roaster, marketer and retailer of specialty coffee. Earnings per share for 2012 look to be $1.78 per share and 2013 earnings forecast at $2.15 per share.

One of the big holders of SBUX is the Fidelity Select Leisure Fund and it is 15.53% of that funds holdings. I was in a Starbucks today and every seat was filled. People are conducting business and interviews there. They seemed very busy. They also have very little long term debt.

So grab a Latte and give your broker a call from your local Starbucks and order up some SBUX.

This stock with an international presence can be the tough guy you need to get you through October in good shape. You can go watch your football game now and relax! 

Better drink decaf, if you are watching the NY Jets!


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