Starbucks May Be Ready Move

 | May 22, 2014 | 4:24 PM EDT
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This morning, I posited that Starbucks (SBUX), Nike (NKE) and a couple of other expensive stocks were having a very difficult time being valued by this market.

Today, we got a sense that there has been a strange benign neglect for these stocks -- as opposed to the malignant repulsion that had been experienced for the Software-as-a-Service (SaaS) types.

Today's action in these stocks, as well as in Panera (PNRA) and Chipotle (CMG), seems totally random unless you consider that they are simply cheaper analogues of stocks such as Salesforce (CRM)/JD.com (JD). The same kind of buyers who come in for all-growth/no-earnings names are willing to pay up for good-growth/good-earnings but high-PE stocks.

I think this whole second slower-growing cohort had been held back by the hideous action in best-of-breed player Whole Foods Market (WFM). The idea that a stock attached to a company of that quality could be cut almost in half gave lots of people pause about owning these other food-related stocks.

I still think that Panera has way too much work to do to front run that turn. I believe that Chipotle's raw costs are still being underestimated. But I think that Domino's (DPZ) has come down enough for traders to do some buying and that Starbucks may, at last, be ready to start a move -- provided that the Salesforce cohort gets to run for a couple of days. Of all of these stocks, I think that Starbucks' has the best chance of beating earnings expectations.

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