The stock price continues to decline for Starbucks. Now at $22.50 and the P/E still at 26. Still a long way to go before the price makes business sense.
Today news came out about a problem with their thermos coffee cups burning people when the handle fails. Reminds me of a Seinfeld show.
This won't help the stock price.
Subscribe to:
Post Comments (Atom)
3 comments:
Canadian Money,
At what price would SBUX make business sense? Today it broke under the 20 dollar mark before finishing up at 20.03.
I view the P/E as a secondary indicator. A red flag that a stock is approaching a point where a large correction could occur at any time.
A P/E of 26 is too high and not sustainable for ever. That doesn't mean that at times people have not bid up a stock to a P/E of 100 or more during market bubbles.
Not sure if there is a definition for a reasonable P/E - perhaps closer to 10. Warren Buffet might say...a P/E less than 1 would be a "steal" if the business fundamentals were good.
CM
ps. never realized how cumbersome it was to leave a comment on this blog.
Update: Oct. 10, 2008
I see Starbucks stock is trading near $10. Still too expensive.
CM
Post a Comment