ucsgears

How to Play Starbucks / Dunkin In relaiton to Coffee?

NASDAQ:DNKN   DUNKIN' BRANDS GROUP INC
104 2 5
You have a technical long Setup? Good - Take a look at the Coffee             ( futures ) - Going down? Better.

Coffee             going down - SBUX             and DNKN             makes a lot of money
Coffee             going up - SBUX             and DNKN             forward earning statements becomes a false. And Traders will drive it down.

Commodity based Stocks and Sectors, DO NOT trade without looking at the commodity.

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Good luck trading.
Great idea!

Also would be worthwhile to check and see how hedged each company is to the price of coffee. Taking a wild guess and assuming the market is pricing in, I would figure SBUX is less hedged thus the wider price movement in the face of declining coffee prices.

However, this strikes me as unlikely given the size of the company - they would have every incentive to manage input costs such that swings in a volatile commodity dont impact their financial statements.

Anyway, I ran a correlation of rolling quarterly returns between SBUX and KC1! its not a strong relationship negative but looks like the strength of the relationship is often negative.

snapshot
+1 Reply
ucsgears PRO SPYderCrusher
Good Insight, Thanks.
+1 Reply
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