First, I would like to thank TheStreet team for aiding in this Starbucks (SBUX) analysis going viral. TheStreet was the first to report the existence of this Starbucks side business. To many onlookers of my Twitter feed (@BrianSozzi), a Starbucks frap truck is nothing more than a catchy headline. However, it's deeper than that, folks, and it's one reason among many that I have returned to being short-term bullish on Starbucks shares. Consider the meaning behind a single quasi food truck.
Starbucks could be on a stealth campaign to launch a delivery service, mapping hot urban locations and gathering intelligence. Hey, Chipotle Mexican Grill's (CMG) well-regarded new catering services will arrive in New York shortly, so why can't Starbucks ponder delivery? Tapping the power of its mobile technology, Starbucks may be amassing information before committing to a strategic partnership with Uber or eBay (EBAY). Now that gives it instant scale.
The food truck shows me that Starbucks has not lost creativity amid recent changes in management. In fact, it reinforces Starbucks' leadership over McDonald's (MCD), Dunkin Donuts (DNKN), Tim Hortons (THI) and mom-and-pop coffeehouses. What company from that group is likely to test a food truck? None in my view, despite the hefty balance sheets of the publicly traded companies mentioned.
Outside of the food truck, look at what Starbucks just unveiled in its new Disney store. Magic chalkboards and other touchscreen tech connecting the company's Disney stores to one another is no joke. Imagine this technology being placed within an American Eagle Outfitters (AEO), so complete that teen strangers could interact on their purchases and styles. The fun aspect: Starbucks is tracking all of this social activity and could lay out its store better to maximize revenue-generating potential.
Around the Horn
Retail death watch: The stock price movements of Pacific Sunwear (PSUN), Quiksilver (ZQK) and RadioShack (RSH) are getting even more worrisome than they were earlier in the year. The market is saying these companies may no longer be viable. Your investing mind should be thinking how the vaporization of these chains will affect rents and occupancy rates at Vornado and Simon Property Group (SPG), as well as deliveries for FedEx (FDX) and United Parcel Service (UPS).
Gyms aren't cool?: I don't know enough about Town Sports International (CLUB) other than that I visit New York Sports Club six times a week. The stock's plunge is crazy, given the number of folks leading healthier lifestyles (somewhere the stock decline ties in with lululemon athletica (LULU), including baby boomers who should be descending on the company's gyms upon retirement. Keep an eye on this stock, as it's a stone's throw away from trading in line to book value.
Railroads, watch those too: Excluding Union Pacific (UNP), railroads took a mild beating in Tuesday's session in the face of very strong car sales. A 58% increase in Jeep brand sales and weakness in the rails definitely grabbed my attention.
The next shocker: Wal-Mart's (WMT) billions of dollars of investment in lower prices is beginning to ripple through the retail sector in a material way. I believe that store closures within the dollar-store sector will increase in 2015, as all of these companies, from Dollar General (DG) to Dollar Tree (DLTR), have over-expanded.