Starbucks shares are up despite having to pay nearly $2.8 billion to Kraft to settle a dispute. Can this stock get any more caffeinated?
Starbucks will be paying $2.757 billion to Mondelez after an arbitrator ruling. This settles a long-standing dispute between Starbucks and Modelez's predecessor, Kraft Foods, over its packaged coffee business. Starbucks walked away from its deal with Kraft three years early when it felt Kraft was mismanaging the partnership.
As of the most recent quarter, Starbucks has about $3.2 billion in cash and investments. Since the settlement will take a huge chunk of that change, the company will be seeking to raise $750 million in debt in the next 90 days.
The market's reaction to all this was positive now that the dispute is behind Starbucks. Shares in the coffee giant rose nearly 1% on Wednesday.The stock is already up nearly 52% in 2013 while the price of one of its biggest inputs – coffee – is down more than a third year-to-date.
So, is Starbucks still a buy? Two traders on CNBC's Street Signs' Talking Numbers segment take a look at the company. On the fundamentals is John Stephenson, portfolio manager at First Asset Investment Management. On the technicals is Steven Pytlar, Chief Equity Strategist at Prime Executions.
To see the analyses by Stephenson and Pytlar, watch the video above.
- Investment & Company Information