Stock Of The Week: Expert Opinion On What Stock To Watch

Experts share their opinions to help with your investment decisions.

Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should watch this week.

Starbucks

Recently, there’s been a surge in the selloffs of hyper-growth stocks which has deterred many investors from any hopes of positive returns this year.

Apart from energy, sectors including healthcare, technology and industrials have all performed worse than their previous quarters. 

However, one stock that has escaped the trend is Starbucks. If we take the last earnings report, Starbucks beat on overall revenues, narrowly missing on the Earning Per Share metric owing to an increase in supply chain and labour costs.

Despite this, during a time when companies have spiked their prices in line with inflation and seen a drastic decline in customer demand, Starbucks have not.

Strong leadership from their CEO Howard Schultz, partnered with their decision to suspend the $20bn buyback programme, and instead investing more into their staff and stores, have all played a part in the stock’s success.

Looking ahead, the pace of unionisation amongst Starbucks employees needs attention, especially given that forty US Starbucks shops have already voted to unionise. Internal conflict between employees and management will be an issue, and if it results in poor publicity, it’s one that shareholders will feel the brunt of.

However, if negotiated efficiently, the company can enjoy the consumer shift from goods to services – a trend that will hopefully boost the bottom line and reassure investors. 

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