Billionaire Stan Druckenmiller’s Top 5 Stock Picks

4. Starbucks Corporation (NASDAQ: SBUX)

Value: $211,510,000
Change in Position Size: 35%
Percent of Stan Druckenmiller’s 13F Portfolio: 5.7%

The shares of the world’s largest coffeehouse chain, Starbucks, surged last week after its biggest Chinese competitor, Luckin Coffee Inc. filed for bankruptcy. The company is growing its dominance in China, with 15.4 million digital members in its rewards program. Starbucks delivered a 34.21% return in the past 12 months.

According to our database, the number of SBUX’s long hedge funds positions increased at the end of the fourth quarter of 2020. There were 67 hedge funds that hold a position in Starbucks Corp. compared to the 66 funds in the third quarter. The biggest stakeholder of the company is Fundsmith LLP, with 10.4 million shares, worth $1.1 billion.

Polen Global Growth in their Q4 2020 investor letter said that they added their position in Starbucks Corporation (NASDAQ: SBUX) because of the company’s fast-growing business momentum.

Here is what Polen Global Growth has to say about Starbucks Corporation in their investor letter:

“During the quarter, we added our position in Starbucks. We felt it was prudent to reallocate capital to faster-growing companies with greater business momentum like Starbucks. With spread mitigation policies globally stifling foot traffic into brick-and-mortar stores, coffee shops have not been spared the burden. As one can imagine, many smaller “mom & pop” shops and chains have gone out of business as a result. In fact, Euromonitor estimates that the number of coffee shops in the U.S. will decline this year for the first time since 2011. Simultaneously during 2020, the U.S. Securities and Exchange Commission (SEC) discovered that Luckin Coffee, once thought to be a formidable competitor to Starbucks within mainland China, had fabricated the majority of its 2019 sales by “intentionally and materially” overstating them. We believe that the runway of growth for Starbucks has been temporarily cleared on a relative basis as its competitors have either weakened or disappeared around the world.”

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