Prepare for the End of the Coffeehouse Boom!
From Motley Fools Blog.
John is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
“If you have either Starbucks or Dunkin' in your portfolio, it may be wise to hold on to these two companies through the summer, but don’t go buying anymore stock because the ride may soon be over. The coffee prices on the commodity exchange will tell the story of where these two companies will go. Once the price of coffee hits $1.30/pound on that exchange, it will be the time to cash in on the gains for these companies, because both will take a hit from the price hike to come. Neither will see a major downturn, though any chance of a repeat of this past year will probably be slim, because these two giants mirror the commodity exchanges very closely.”
SBUX sees the handwriting on the wall and is starting to raise prices early. Testing the water.