Companies constantly need to reinvent themselves to stay competitive. Sometimes, a change of management can break the stale company culture and breathe new life into a company. However, sometimes new management may stray too far, or, worse, not make new big and bold change to move the needle.
When new management comes along, traders may not always know what they’re going to get. But when a former manager comes back to a company, it can sometimes lead to resurgent growth and a renewed focus.
That could be the case with Starbucks (SBUX). The company’s existing CEO is stepping down, and former CEO Howard Schultz is coming back temporarily… now for a third time.
The company is feeling a little stale right now, given economic uncertainties, rising commodity prices, as well as unionization attempts by company workers at various locations as well.
However, with the stock down over 25 percent from its recent highs, this leading global brand will likely rise higher again, and analysts are starting to see the value as well.
Action to take: Investors may like shares here for the long haul. Even with the recent slide in shares, revenue is up nearly 20 percent over the past year and earnings are up nearly 30. Plus buyers today can get a starting dividend yield of 2.2 percent, which is likely to continue growing over time.
Traders can likely nab mid-double-digit gains with the June $95 calls in the coming weeks as well on a move higher in the stock. The calls last went for about $2.05.
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.