Starbucks (SBUX) Stock SKYROCKETS Over 24% - My BIG Concern 😬

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Yesterday, Starbucks (SBUX), which is one of my favorite dividend stocks, came out with some pretty big news that send the share price skyrocketing over 24%. The company announced that their CEO, Laxman Narasimhan, would be stepping down immediately, after only being with SBUX for a year and some change. In this video, I'm sharing my thoughts on the news, along with a few lingering concerns and what it means for this dividend growth monster.
The ideas and opinions presented in this video are meant for informational and entertainment purposes only, are not intended to serve as a recommendation to buy or sell any security in any account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision.

[@rynewilliams]

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[@Duke_of_Prunes]

I should have listened to you and opened a SBUX position. But too many restaurant brands were faltering. My wife DID buy SBUX and did pretty well yesterday. Great pick thanks to your show.

[@rynewilliams]

Yea restaurants are definitely going through a tough time…I don’t think they’re out of the woods yet

[@hatework4282]

I got out yesterday at 96. Decided to take my 20% and run.

[@Mayoroftown420]

i did the same

[@rynewilliams]

Nice gain!

[@mcthunderstick2374]

Me too, I only had a few shares but couldn’t see myself adding above $96 so I tapped out. I’ll reconsider if there’s considerable pullback in the next couple weeks

[@hatework4282]

@@rynewilliams Agreed. I only wish id have had more capital to throw at SBUX before this. Cant complain though.

[@hatework4282]

@@mcthunderstick2374 Thats where im at too. might jump back in if it gets back down into the 70s, but I'd be shocked if it got that low

[@TheDGICrab]

Glad I built up a strong position with a cost average in the mid 70s. Happy to hit pause on this one and build up other positions.

[@rynewilliams]

I’m jealous of your average cost!

[@brianhall2525]

Yeah...I was buying in mid/low 70's and I sold a majority of my shares yesterday. I'm not sure how someone wouldn't want to take something off the table with a massive gap up like this, as it will most likely be back in the 70's at some point this year or early 25'. I sold in my 401K and Roth account while letting my taxable account ride.

[@TheBeagle1956]

My average cost for SBUX is $43.05 and later this month I’ll be receiving $1,147 in dividends. I’m not selling. Time in the market is more important than timing the market. The fundamentals are softer, but not bad. I’ve hung on with this company before and it always bounces back.

[@TheBooban]

Just curious. Have you ever sold it? Trim a bit at the top?

[@TheBeagle1956]

@@TheBooban Probably. I can’t recall the specifics. This year I trimmed some AVGO, LLY and MSFT, for charitable giving, to raise some cash and to roll some into DGRO. In my taxable brokerage account where my SBUX is, dividends are used for living expenses and I only sell stock if I need to raise cash for paying taxes on Roth conversions or some other large expense, along with donations to our donor advised fund for charitable giving.

[@TheBooban]

@@TheBeagle1956 you sell stocks to donate the money? Oh. I’m conversing with someone far better off than me. Well, well done!

[@TheBeagle1956]

@@TheBooban Well, we’re both 68 years old and started investing seriously in our early 40s. It’s not rocket science. Live below your means, but still enjoy life along the way (but not too extreme). Save and invest in a diversified portfolio and learn to watch for opportunities. Best thing we ever did was pile into stocks when the markets tanked.

[@TheBooban]

@@TheBeagle1956 thx man. I’m 50 and never really had enough money to invest properly. But started 20 yrs ago and think I’ll be good in 10 years, hopefully 5. I just have to remember to enjoy life too. Best wishes to you!

[@nathanvanwie643]

Both chipotle and Starbucks near me struggle with speed of mobile orders, 100% discourages me from going back more. My order would be 2 drinks only (different types) and app would say ready in 8 minutes. I walk in like 12 minutes later and one of my drinks is ready but then needed to wait 5 or even 10-15 minutes for the second drink. The store must have poor communication between staff.

[@wolfaye739]

Mobile orders aren’t gauged for how long the drinks take to make and current floor deployment( call outs, new worker on bar, influx of mobiles at peak times) The app is a corporate estimate of how long stuff should be taking but not an actual input from the people making your stuff

[@slowpoke8585]

Yeah, see, THIS is what’s wrong with Starbucks! I worked at Starbucks and the reason why Mobile Orders won’t be ready in a timely manner is because corporate wants us to focus SOLELY on Drive Thru. I don’t know what their obsession is with Drive Thru times, but it’s resulting in other areas faltering. I always tried giving all types of orders equal attention, but my bosses always scolded me for not prioritizing Drive Thru so I had to ignore Mobiles. It sucks because other customers matter too!

[@duttysupra]

Sold out this morning - at 93. Was in profit . No good news at the moment for sbux in which I like.

[@jortega61924]

Starbucks are closing earlier and earlier in my area. They used to close at 11pm . Now they are closing are 8 😱 business slow??

[@Jayvazquez15]

It’s because the old CEO didn’t work after 6pm😂😂

[@brotski100]

I used the oppertunity to sell all at a very small loss and put half of it into chevron and half in the vanguard all world ETF

[@rynewilliams]

Good thing it was only a small loss!

[@Kunuku_Benedict]

Nothing about SBUX lackluster fundamentals changed when they named the new CEO and the stock jumped to the mid 90s. Maybe he'll be able to work some magic, but all of the hurdles that were present before he was hired still exist. I completely sold out of it with a cost basis of 84 when it hit 95/share. As far as I'm concerned it was a gift from the investing gods that I was able to turn that much of a profit on it.

[@Winston0Boogie]

I'm glad. I really didn't like Laxman. Originally reading about him and I read nothing about any experience with restaurants.... I think I read P&G and I'm thinking..... Wtf? During the earnings call I heard that and the Cramer interview and it's disgusting how he treated it. Niccols has experience in restaurants so I'm much happier.

[@MichigantoFlorida]

Hello Ryne, Starbucks new price target is $118. and it is way overbought. I will add a little more aggressively on pull backs now as in the past adds were conservative. CMG CEO will get it done, Elliot Management Team is a power house and a great combination with Brian Nicoll. I suspect through put and excessive inventory will be the initial targets. Will be watching this one carefully.

[@rynewilliams]

I hope you're right!

[@MichigantoFlorida]

@@rynewilliams Overbought- not oversold.

[@arigutman]

Starbucks is setting itself up well, but unfortunately for THIS investor, I am out!

[@rynewilliams]

😢

[@sat_lok_]

I took my 16% profit and ran. Don’t think I’ll get back into it unless it hits the lows again.

[@johnchan9392]

I recently started to invest in SBUX for the long haul and DCA. Coffee will never go out of style, too many people are addicted to it. I have never touched it and never will, even after 13 years of university years. We have to remember that big price swings (either way) are priced in 6 months forward looking. We see this all the time with poor earnings and good forecasting, price jumps in the AH. Same goes with great earnings and poor forecasting, price tanks in the AH. The jump yesterday is baking in on an amazing track record for the incoming new CEO.

[@rynewilliams]

Yea we'll see what happens from here!

[@johnchan9392]

@@rynewilliams - yes. another reason why I am DCA, it can go either way in this crazy time of the markets.

[@TheBooban]

@@johnchan9392I also DCA. But only had time to do it once! 20% of $150, lol, no point doing anything.

[@Bur6212]

I’m in Disney and could use a starbucks right about now…

[@rynewilliams]

I’ll keep my fingers crossed for you 🤞

[@asnarkygirl]

Disney will bounce back.

[@AndrewsInvestmentJourney]

I'm with you on Disney, Im hoping Disney and Paramount come back. Down 40% on Paramount

[@DividendDiary]

I sold at $94. Also do not bellevue in sustainability of this rise

[@rynewilliams]

Yea looks like it’s already seeing a pullback today. Probably a lot of profit taking

[@Hhbhwumnsioocyhejkxiihha]

I got out today and will buy back if it drops to $80 otherwise I will gladly take my 15% profit

[@Jayvazquez15]

Great tool you are making!!! As of now I’m holding my SBUX position since I’m up over 12%! Great analysis!

[@rynewilliams]

Thanks man! It's been a fun process seeing this come to life. Also, nice gain on SBUX - you're up more than I am!

[@pepinlebref7585]

I am happy for you, but share your concern. This is why I didn't open a position. I see it having very little growth potential in the coming years. The market is already saturated with Starbucks and customers might be more careful about spending $10 everyday on coffee. I would take the opportunity to sell and invest in a business that is more recession proof.

[@billcarruth8122]

Don't underestimate the power of a great CEO. I'm pretty sure Brian Niccol did his own extensive analysis of Starbucks and seen something he could work with before accepting the role.

[@rynewilliams]

One would hope so!

[@TheBooban]

I won’t. But not convinced he can do anything about China, where their main problem is. He has no experience in that.

[@asphaltandtacos]

CMG will bounce back at some point

[@TortoiseInvesting]

I think its a great change for the future of Starbucks, but a bad change for Chipotle going forward. This is a whole new world hes going to be entering into, but I'm anxious to see what and all he does and deliveries for Starbucks, and I'm curious if Chipotle will be able to continue their run in the future.

[@rynewilliams]

Agreed man, what happens next will be very interesting indeed

[@GreatGodNyx]

Def my play with my position is a hold till I see results from the new CEO prob won't be buying anymore SBUX shares and will be working on my other holdings. Though did acquire a lot like you when it was down. Maybe when sales start to trend upwards maybe try to hit that 100 share mark.

[@rynewilliams]

Sounds like we have a similar plan with it!

[@authentiking]

Great. Now my drinks are going to cost more while being only half-full 😂

[@Azwel]

The stock was in the 90s before this whole mess. I’m not selling it here

[@slowpoke8585]

Yeah, I don’t see it doing worse than $68 per share. Times are just tough for now with inflation and whatnot.

[@keepitraw1]

Any change, even if positive, will take at least a year. Took my 13% and plan to invest it in alphabet

[@rynewilliams]

Sounds good!

[@intercomposed1308]

Are you concerned that the new CEO would push a new approach to dividend payouts? Chipotle isn't a dividend payer.

[@rynewilliams]

I think it's a possibility, but it's not something I'm overly concerned about quite yet

[@Godfather9814]

And now it’s down -4% today lol I only got a little over a share when it was in the 70s so now I’m gonna wait and see what happens before adding more

[@rynewilliams]

Lot of profit taking today

[@Godfather9814]

@@rynewilliams yeah but I’m in the long haul and the passive income so I’m holding strong haha

[@rynewilliams]

@@Godfather9814 same here

[@Godfather9814]

@@rynewilliams are you still adding to it? Or are you gonna wait till it drops more?

[@rynewilliams]

@@Godfather9814 I’m holding off on it

[@MalaysianDividendInvestor-g7h]

Im not sure if i will be adding into Starbucks, i have so many other stocks that i want to buy and even with the dip i didn't feel like adding Starbucks, and now with the huge price increase, chances are i won't be buying anytime soon.

[@rynewilliams]

That’s fair. Which other stocks do you want to buy?

[@MalaysianDividendInvestor-g7h]

@@rynewilliams as of right now, I'm looking at Visa, UNH, JNJ, and SCHD

[@analyticsx3]

Could be a huge overreaction unless they were largely undervalued. All it takes are a few giant funds buying shares

[@rynewilliams]

Yea looks like there’s quite a sell off today

[@analyticsx3]

@@rynewilliams I’m sure people were taking profits. It will come back to earth. I have shares of Crowdstrike and after the outage it tanked. It’s almost recovered to my cost basis. But it doesn’t matter it takes a few years to have sustainable gains if they are a good company.

[@Diviguru_410]

Hi Ryne! Since Sbux is in the 93 per share is it a good idea to buy more or wait

[@rynewilliams]

I’m personally holding

[@jollama]

Still going to hold for the next 40 years to see what happens

[@rynewilliams]

Good things ahead

[@alvinjohnson9531]

I'll stick with my vetti ice coffee!😂😂😂

[@UncleCharlieFTW]

Can you review and analyze OBDC? The drop is weird and I dont find anything causing it.

[@rynewilliams]

I'm wondering if it has anything to do with the merger they recently announced. Here's an article on it if you want to check it out: seekingalpha.com/news/4136662-blue-owl-capital-corp-delivers-q2-beat-signs-pact-to-merge-with-obde

[@UncleCharlieFTW]

@@rynewilliams Thanks Ryne! I read about it in their last earnings call but in general this sounds like a good thing to me and sort of a sign of driving the share price up.

[@marcr27]

time to sell starbucks

[@rynewilliams]

Hopefully you can lock in some gains!

[@normanrayburn1459]

Keep going Ryne

[@rynewilliams]

You too my friend!

[@masonbockoven1202]

I am curious as to your opinion on selling low delta covered calls on dividend positions? In your opinion is it worth putting up shares of dividend stocks as collateral for options premium and then turning around selling puts if assignment happens? Or do you prefer to just let dividend stocks sit and not sell options against them? Love your videos, thanks!

[@rynewilliams]

I think it can be worth it. It’s not something I personally do (yet), but I know plenty of other investors who implement covered calls into their strategy and it works out just fine for them

[@masonbockoven1202]

@@rynewilliams thank you Ryne!

[@nic6778]

Do you have any DAVE AND BUSTERS?

[@rynewilliams]

I do not! Do you?

[@Norfolkpaul]

Nice job on your video 😊

[@rynewilliams]

Thanks Paul!

[@robertdagostino1020]

Starbucks should get back to their roots. I see some now just go in and get your coffee some now no place to sit look at your laptop etc and enjoy some company. Don’t like these walk in walk out on some stores

[@Zegeebwah]

Take your profits now. $5 Hot bean water in a recession won't last.

[@rynewilliams]

What do you mean it won’t last?

[@Zegeebwah]

@@rynewilliams Yeah I guess 'last' isn't the right word so much as CEO swapping is a temporary band aid on a fundamental product issue.

[@Loft817]

Bad tasting hot bean water. The coffee is absolute trash

[@RippingProfits]

Why you so sad my friend? Wanted to buy one day before 😅

[@rynewilliams]

I'm not sad at all

[@aah_124]

Boom! SBUX is going to $200.

[@rynewilliams]

Haha that’d be nice. Let’s see what happens!

[@aah_124]

@@rynewilliams They aren't paying new CEO to go up 20 percent. This will be big.

[@rynewilliams]

@@aah_124 they weren’t paying the former CEO to lose 20% either though. It’s too soon to say how things will play out

[@BackgroundMoment]

First🎉

[@rynewilliams]

Nice!

[@AnalyzeStocks]

Hey Elliot! Can you invest in WBD? 🥲

[@rynewilliams]

Who is Elliot?

[@AnalyzeStocks]

@@rynewilliams haha sorry I’m referring to the activist investor who bought Starbucks. We need activist in WBD imo

[@rynewilliams]

Oh I should’ve registered that, my bad 😂 For some reason I thought you were calling me Elliot

[@camai75]

Holding my position. 130 shares at $88. I really like how SBUX board realized the hire was a mistake (Laxman) and took actions to rectify it. Love the hire..holding for now, will add on pullbacks.

[@rynewilliams]

Wow solid position man!

[@slowpoke8585]

I worked at Starbucks. I feel it can get back up to $110 a share. It’s definitely gonna take time so hang in there! (Not financial advice).

[@NolanGouveia]

I knew you’d be on this one! Good work my friend

[@rynewilliams]

Thank you man! Happy to see the big jump

[@ObadiahCorey-u7y]

Lee Sandra Lewis Margaret Thompson Ronald

[@fernandojsagas]

Restaurants are struggling right now, the inflation is killing businesses and people’s budgets. Let’s see what happens especially with the election this year.

[@rynewilliams]

Let's see what happens. Lot of moving parts right now

[@robertdagostino1020]

I’ve owned SBUX for several years I look at the drive through in the mornings and the cars line up just like McDonald’s. In my day cigarettes were in todays younger generation is Starbucks Both my daughters married get their Starbucks My cost SBUX is $68. Only a 100 shares and pays decent dividend

[@paulbaldemor3141]

Sold my position at $95!

[@JJInvesting]

Congrats to the Starbucks holders 🍺

[@rynewilliams]

Absolutely!

[@rssharma9]

I am slowly adding to my Chipotle position. Brian Niccol is a fantastic CEO (reminds me of Mulally of Ford) but I expect the stock price of SBUX come down in the near future. Niccol needs time to turn around the company.

[@MatanKarni]

Starbucks stock loved the news. What makes it even better is the fact that Chipotle's investors didn't like the fact that they are loosing their beloved CEO and the stock dropped 5%.

[@slowpoke8585]

I think Starbucks’ main concerns is beverage quality, prices and stores that are inviting to hang out. They’re not interested in improving in ANY those! All they care about is “customer connections”. Waste of time!

[@TCG_Pocket]

They took out the restrooms and chairs in a lot of places. Also they have cut the outlets so you can charge your devices. You can’t hang out any more

[@stephenmclean3029]

I love this combination. Starbucks to the moon! Niccol could bring Starbucks in the 110-120 price range. Thanks for the Starbucks recommendations a while back so I picked it up at 72-75 range so this is a nice bump plus the dividend. Great company to have in the portfolio.

[@rynewilliams]

Let's see what happens with it!

[@camai75]

Overall, this is great for SBUX. I fully expect a pullback or $5-10 from this high, but overall I’m reinvigorated with SBUX.. Now I need something like this for my NKE position. Lol

[@rynewilliams]

Haha stranger things have happened...let's see what NKE does!

[@DividendInvestor97]

Yeah I sold around $94-$95ish the other day my average on $SBUX was around $83 & I started a position in $PAYC & bought 2 shares of $TROW, great video breakdown! 👍🏾

[@rynewilliams]

Nice CJ, sounds like you bought some solid companies. Thanks for tuning in man!

[@nilst3791]

i think should have used the great opportunity to bag some of your massive win (sell half your shares) because as you said it is going to drop very likely very soon again so would potentially been a smart move to cash out and shift to great businesses that are still recovering from that recent weird market volatility 😅

[@rynewilliams]

Perhaps!

[@shanegreen1477]

I took advantage of the dip over the last 2 months and built out a position, over 110 shares with a cost basis in the $78 range. I think its a good buy under 80 but wont be adding any at current prices. Perhaps again in the future but a new CEO doesnt change fundamentals.

[@rynewilliams]

Wow that's an impressive position...nice going!

[@doddergo]

I won't be surprised if it comes back down. There's a big gap on the monthly chart.

[@rynewilliams]

Yea it'll be interesting to see how it shakes out

[@marklucero9663]

The profit on this was too good to pass up, Im sure I'll get another chance to get back in!

[@rynewilliams]

Probably so!

[@kentaylor30]

I have waited for my download link several times and it never comes. Please, put me on your newsletter list and send me the spreadsheet as promised.

[@rynewilliams]

I’m sure it just went to your junk folder. That happens from time to time. If you email me at [e-mail] I’ll personally send you the link right now!

[@davidguest1158]

I sold mine quickly. Wanted to get more into dividend paying funds rather than shares. Nice little 25% profit for me,which I normally would of missed. Only saw it due to your previous video, so thank you mate 😎👌

[@rynewilliams]

Nice gain my friend! 👏