Investment Ideas from Alpari: Starbucks

Investment Ideas from Alpari - Starbucks
Investment Ideas from Alpari - Starbucks

Starbucks Corporation is involved in the processing, production and retail of its own brand of coffee. The corporation owns retail outlets all over the world and also sells its products through trading groups, partners, supermarkets and online stores. Its sources of revenue are reasonably well diversified in a geographical sense. 69.5% of its revenue is generated in North and South America, 14.7% in the Asia-Pacific region, 4.7% in Europe, the Middle-East and Africa and 11.1% comes from the rest of the world. In total, the company has over 25,000 retail outlets in 75 countries around the world.

Growth factors:

The implementation of the company ambitious plans for further aggressive growth as well as improving financial indicators will stimulate a growth in share prices. Starbucks profitability continues to grow. Return on equity in the first, second and third quarters of 2016 amounted to 45.79%, 46.11% and 48.16% respectively. The ratio of net profit to revenue gradually increased throughout the first, second and third quarters of 2016 and stood at 11.8%, 13.8% and 14.8% respectively. Cash flows from operational activities in the second quarter of 2016 grew by 96.8% (QoQ), and in the third quarter by 20.97% (QoQ). The company debt load is decreasing; the ratio of debt to total assets in the second and third quarters of 2016 amounted to 26.04% and 25.14% respectively. The aggregate debt to EBITDA in the third quarter of 2016 decreased by 5.48% (QoQ).

Expected Return — more than 35% per annum

Expected yield is calculated according to 95% capital protection and the price of the base asset at expiry, equal to 71 USD.

This investment opportunity is provided by Alpari.

Alpari International Limited is part of the Alpari group of companies, a recognized global leader in Forex. Alpari has offices in all the major financial centers around the world, including London, New York, Tokyo, Shanghai and Frankfurt. Their monthly turnover exceeds 280 billion USD.

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