While the next market-moving news may not be positive, over time, investing in the stock market is more rewarding than betting against it.
And with so many companies knocked down last year and into the current banking fears, investors who start buying shares of companies with strong brands could see big profits ahead. Best of all, brands can include a variety of industries. And chances are that brand is a household name, which brings familiarity in uncertain times.
One of the world’s best-known brands is
Starbucks (SBUX). The coffee chain has created a “third place” between the home and office. But there’s some uncertainty, as CEO Howard Schultz has left the role for a third time.
That short-term uncertainty from the changeover could be a long-term gain for Starbucks investors. The company is working to simplify its operations, and shares have done better than the S&P 500 in the past year, gaining nearly 13 percent.
Action to take: Starbucks shares are a reasonable long-term buy at current prices or on a drop lower. The stock yields 2.1 percent, and the company has done well with growing that dividend over time, even as they suspended share buybacks last year. Over time, increased cash flows can likely drive both those ways of rewarding shareholders higher.
For traders, the recent pullback in shares will likely reverse now that the changeover is complete. The June $105 calls, last going for about $3.45, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
