64.92 +0.45 (+0.7%) Sell

Don't give up on SBUX now, it gave a fairly good return

13 min read

STARBUCKS CORP delivered good returns on Tuesday. It grew by +0.7% to close at 64.92. It is currently trading +33% above it's 52 week low of 48.54 and is down only -5% from it's 52 week high.

[Themes containing SBUX]

SBUX showed a strong up trend over the last 3 months. During this period SBUX grew by +17.12% and saw a maximum drawdown of -6.18%. There was a long signal during this period which returned +16.31%.


SBUX has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 14 days, SBUX underperformed the SP500 index on 47% days. Which indicates that on days SBUX underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months SBUX was mostly profitable and delivered on average +0.27% per day. It's best return during this period (of +9.7%) was on Friday, 2 Nov, 2018. While it's worst loss in the same period (of -2.95%) was on Wednesday, 10 Oct, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 8 Nov, 2018. The bullish trend returned +17.02% to investors. This was followed by a bearish trend that started on 19 Nov, 2018 and ended on 26 Nov, 2018. This bearish trend lost -3.67% of investor capital.

SBUX had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of SBUX and SP500 index were the same. SBUX significantly outperformed SP500 index in Nov 2018, when it returned +14.5% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SBUX had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both SBUX and SP500 index significantly outperform during months when quarterly/annual results are announced.

Wealth is not his that has it, but his that enjoys it.
-- Benjamin Franklin

SBUX is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in SBUX's volatility from 5 Oct, 2018 to 2 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SBUX has significant positive skewness in it's return distribution. This indicates that investors can expect SBUX to recover from drawdowns quickly. Which makes SBUX a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in SBUX derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than SBUX. Therefore, SP500 must receive a lower allocation than SBUX in your portfolio. SP500 index usually has shorter drawdown period than SBUX.

On a general note (since you are interested in SBUX), CSCO is a large cap that deserves to be closely tracked for investment opportunities.

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