Tonight on Cramer’s MAD MONEY on CNBC he featured his SELL BLOCK where he reviews his past picks. He briefly noted the reactions in Google and Under Armour. Some of these high multiple names can’t just report in-line results.
He said that is what happened to Starbucks (SBUX). The street wanted to see a great job even though the company thought it did a good job. It may have hit a wall by Cramer’s view. Cramer interviewed Howard Schultz (CEO of Starbucks) and Schultz said the company has not hit any wall at all. He said the quarter was strong and there are 30% more customers with Starbucks cards. He talked India, Russia, and China coming online too. The street expectation is one thing but they are targeting 20% revenue growth and 25% earnings growth. But Cramer said he had to trim off a penny from the EPS model. The 2400 stores thatare planned to be opened are already having signed leases and the actual rents aren’t going up; they are pre-paying for leases and locking in deals. SBUX closed down 1.5% today at $34.41. Cramer said this adds up for a longer-term horizon but he says this isn’t one he is sure if he can pull the trigger on yet. Shares traded down marginally after Cramer said this, as it is far from his usual bullish stance on the stock.
Jon C. Ogg
February 1, 2007
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