Stocks are Off to Their Best Start Since 1998; Is it Time to Buy Starbucks (Nasdaq: SBUX)?

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Even with the recent dip, stocks are off to their best start since 1998.

The Dow ended the first quarter at 13,212, up 8%. The Standard & Poor's 500 Index added 12% and the Nasdaq finished with a whopping nearly 19% gain.

And, if history is any guide, April should continue to bode well for stocks.

According to data from Schaffer's Investment Research, the S&P 500 has risen every April for the past five years.

In all, the index has returned an average of 4.5% for the same period, making April the best month for the market by far.

So, with all signals pointing at go, where should investors look for a jolt?

Perhaps they could take a sniff at what's brewing over at Starbucks (Nasdaq: SBUX).

Juiced About Starbucks (Nasdaq: SBUX)

The Seattle-based coffee giant recently launched its first Evolution Fresh juice bar.

Located in the tony town of Bellevue, WA, not far from the company's storied headquarters, the opening has been highly anticipated, not much unlike coffee junkies waiting for their caffeine fix.

For Starbucks fans and investors, Evolution Fresh marks something of a departure.

The move is the latest venture to date from the world's largest coffee chain to branch out from simply brewing coffee. The company hopes the endeavor will boost its presence in the ever-growing and increasingly popular $50 billion health food industry.

The juice bars will sell fresh fruit and vegetable drinks, along with wraps, salads and soups. The eclectic menu will also feature an array of vegan and vegetarian offerings.

Since purchasing Evolution Juice in November for $30 million in cash, Starbucks has evolved from simply selling the healthy brews in niche markets such as Whole Foods. It now stocks shelves in local and chain grocery stores with the beverages.

Fresh fruit and vegetable infusions have exploded in recent years as many healthy and calorie-conscious consumers have embraced them.

Some use them as a meal replacement, while others imbibe as part of a "cleansing" ritual or tonic. Others simply enjoy the drinks for their taste and thirst quenching ability.

Starbucks Sinks Green Mountain Coffee Roasters

With it stellar ability to expand and be innovative, Starbucks has been especially busy of late.

Just a few weeks ago, the company introduced its own single-serve coffee machine. Called the Verismo, the K-cup-like coffeemaker will dispense a "cup-of-joe" from Starbucks' signature blends in just minutes at home or in the office.

News of the new machine sent shares of rival Green Mountain Coffee Roasters (Nasdaq: GMCR), which holds the patent on Keurig machines and the K-cup technology, spiraling downward.

Industry analysts have long been critical of shares of Green Mountain, and have questioned its steady and upward ascent. Now, Starbucks' move into Green Mountain's territory has left a distinct and bitter aftertaste. It looks like it is time for Green Mountain investors to wake up and smell the coffee.

Things at Starbucks continue to percolate as the company persists in having something always roasting. With some 17,000 stores, Starbucks is a recognizable presence on almost every street corner.

It competes with the likes of stalwarts McDonald's and Dunkin' Donuts, but Starbucks has a cult-like following of steady, loyal and "addicted" customers that appears to be unbreakable.

The java giant also realizes that man does not live on coffee alone. It is constantly developing and expanding to attract new customers and keep current clientele. CEO Howard Schultz is a truly hands-on and exacting leader.

And speaking of expanding, Starbucks just announced it has plans to triple its store count in China, believing China will become its second-largest market by 2014.

With all the tea in China, it is a bold, but achievable goal for Starbucks.

The coffee giant opened its first store in China in 1999. It currently operates more than 570 outlets in 48 Chinese cities.

According to Bloomberg News, John Culver, Starbucks' head in China and the Asia Pacific, says he sees "tremendous opportunity" in the region and that increasing its presence in the area is "most definitely" a viable way to grow.

The stock pays a modest dividend of 17 cents a quarter, and yields 1.22%. Shares are actively traded and can be volatile, but investors have been handsomely rewarded of late.

So consider waking up your sleepy portfolio with Starbucks. The iconic coffee shop may just be the jolt your portfolio needs.

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  1. Mohamood Mitha | April 5, 2012

    What is the view on Oil now??
    Looks like it wants to test $100.
    Are you going to revise your $150 call???

    • Fred Stork | April 5, 2012

      This is somewhat irrelevant to the subject (coffee), but read Kent Moors reports on oil/energy, he is the world's top expert on energy, and consults royal families along with Arab oil sheiks. If you Google "kent moors", something will come up, and then sign up for news letters. His portfolio is making "killing", as he has info from behind closed doors of governments and huge corporations. He also knows the trends, as opposed to talking heads in the news. All legal, tho.
      He is part of Money Morning operation, you may find him on their website, too.

  2. Eduardo T Valencia Aldaz | April 5, 2012

    he visto su oferta economica que ofrecen como prestamo pa trabajar en forma comercial en mi pais por esta razon yo solicito un prestamo 150'000,000.00 de dolares americanos pa trabajar comercialmente en mi pais si es que uds. me dan este apoyo me sentiria muy entusiasta pa trabajar con uds. su esmpresa STARBUK SUMIDEROS VERDE MONTAÑA TOSTADORES DE CAFE les agradeceria mucho quedo en espera saludos de EDU.

  3. Zoe | November 18, 2013

    What is the date for this article's publication?

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