We will trim our Starbucks (SBUX) position after you receive this Alert, selling 350 shares at roughly $57.62. Following the trade, SBUX will represent 2.96% of the portfolio.
SBUX shares have risen 7% since the lows following the company's disappointing earnings report a couple of weeks back and we want to take advantage of the move as a way to de-risk the portfolio from the company's ongoing through-put concerns and the resulting pressure on same-store sales.
While we have long-term confidence in the management team, we recognize there are increased risks with the transition of CEO Howard Schultz into more of an overarching innovation role and as the company looks to implement a plan to combat recent sales pressures. We expect investors to remain skeptical until a specific strategy is enacted to battle through-put concerns.
We are still leaving nearly 3% of the position on the table as we respect SBUX as a premier global brand (which is growing internationally, with a specific focus on China) and we want to be able to benefit from the company's long-term growth initiatives, but we are taking this move with more of a short- and medium-term mindset given the difficult backdrop.