No One Wants to Wait 30 Minutes for a Coffee-Shop Order
RJ Hamster
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No One Wants to Wait 30 Minutes for a Coffee-Shop Order
By Ethan Goldman, junior analyst, Chaikin Analytics
Starbucks (SBUX) has a serious problem…
Sure, the coffee chain is huge. It’s worth about $102 billion in market cap. And it operates more than 40,000 stores across the globe.
But the massive growth has led to accusations that the company has “lost its way.”
Starbucks has had its share of external and internal conflict in recent years. I’m talking about employee strikes, boycotts, and lawsuits. One lawsuit even involves a customer burning his genitals with a cup of hot tea.
But the biggest problem is likely that folks are just tired of the experience.
Over the years, Starbucks’ menu has grown increasingly complicated. And some wait times are out of control.
Bloomberg reported last year that about 8% of customers wait between 15 and 30 minutes to get their orders.
Now, consumers are looking for – and finding – alternatives…
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More Folks Are Turning Elsewhere for the Coffee Shop ‘Experience’
One of those alternatives is Dutch Bros (BROS).
Two brothers from Grants Pass, Oregon founded the company back in 1992.
Back then, their family’s dairy farm had fallen on tough times. So the brothers saved up money to start a new business – an espresso cart in downtown Grants Pass.
The Dutch Bros name honored their grandparents, who immigrated from the Netherlands.
The brothers’ business ramped up over the years. Today, Dutch Bros operates more than 1,000 locations across 18 U.S. states.
The company prides itself on being more than a cup of coffee. It supports local food banks and youth organizations.
Dutch Bros also runs a fundraiser called “Drink One for Dane.” It honors one of the founding brothers, who passed away from ALS in 2009.
The company even garnered media attention in 2016, when “broistas” at a Vancouver, Washington location consoled and prayed with a woman in a drive-thru. The woman’s husband had passed away the night before. And a picture of the encounter went viral…
To be fair, I can’t attest to the quality or taste of Dutch Bros’ coffee. I haven’t tried it.
Users on various social media sites remain divided over the company’s coffee versus Starbucks. But one thing is for sure…
Plenty of folks prefer Dutch Bros for its experience.
A Big Difference Between the Stocks of Starbucks and Dutch Bros
The Power Gauge notes this in its own way. Starbucks currently earns a “very bearish” rating in our system. And three out of its four individual categories earn “very bearish” ratings right now – Financials, Earnings, and Experts.
In fact, Starbucks has been in “neutral” or “bearish” territory for most of the past five years.
Over that five-year span, the stock is up only about 7%. That’s terrible compared with the S&P 500 Index’s roughly 86% gain over the same time frame.
Meanwhile, the Power Gauge tells a different story with Dutch Bros…
The company currently gets a “bullish” overall rating. And its individual categories are stronger overall than Starbucks’ categories right now. Earnings and Technicals are “very bullish.” And Experts is “bullish.”
Dutch Bros went public in September 2021 at $23 per share. Since then, it’s up more than 200%. That blows Starbucks’ five-year performance out of the water.
Starbucks’ drama contrasts Dutch Bros’ rise to local fame.
A corporation’s customers and employees are human. So the experience a company provides matters.
Starbucks is struggling to make its customers happy. And now, Dutch Bros is on the rise.
The Power Gauge sees the difference in these companies’ stocks. Starbucks looks poised for more downside ahead… while Dutch Bros looks poised for upside.
Good investing,
Ethan Goldman
Market View
Major Indexes and Notable Sectors
# HLD: BULLISH NEUTRAL BEARISH
Dow 30
+1.04%
9
14
7
S&P 500
+1.03%
99
256
144
Nasdaq
+0.98%
31
54
15
Small Caps
+1.62%
474
1018
391
Bonds
-1.27%
Energy
+1.88%
1
9
13
— According to the Chaikin Power Bar, Small Cap stocks have become somewhat more Bullish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+3.23%
Energy
+2.31%
Communication
+2.28%
Materials
+1.67%
Industrials
+1.48%
Health Care
+1.31%
Financial
+0.63%
Real Estate
+0.36%
Consumer Discretionary
-0.76%
Utilities
-0.89%
Consumer Staples
-1.38%
* * * *
Industry Focus
Mining Services
14
18
1
Over the past 6 months, the Mining subsector (XME) has underperformed the S&P 500 by -0.14%. However, its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors and has moved up 7 slots over the past week.
Top Stocks
NEM
Newmont Corporation
ZEUS
Olympic Steel, Inc.
ATI
ATI Inc.
* * * *
Top Movers
Gainers
PLTR
+6.51%
MRNA
+5.13%
UAL
+4.83%
DAL
+4.32%
TER
+4.27%
Losers
LULU
-19.8%
AVGO
-5.0%
MOS
-4.4%
NEM
-3.94%
POOL
-3.69%
* * * *
Earnings Report
Earnings Surprises
ABM
ABM Industries Incorporated
Q2
$0.86
Met estimate
* * * *
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