Here’s Why Polen Capital Sold its Starbucks (SBUX) Stake

Polen Capital, an investment management firm, published its “Polen Focus Growth Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Polen Focus Growth Composite Portfolio (the “Portfolio”) returned -13.39% and -13.56%, gross and net of fees respectively. The Russell 1000 Growth Index returned -9.04% (the “Index”) and the S&P 500 (the “S&P”) -4.60%.  Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022. 

In its Q1 2022 investor letter, Polen Focus Growth Fund mentioned Starbucks Corporation (NASDAQ:SBUX) and explained its insights for the company. Founded in 1971, Starbucks Corporation (NASDAQ:SBUX) is a Seattle, Washington-based coffeehouse company with an $89.9 billion market capitalization. Starbucks Corporation (NASDAQ:SBUX) delivered a -32.91% return since the beginning of the year, while its 12-month returns are down by -29.55%. The stock closed at $78.47 per share on June 08, 2022.

Here is what Polen Focus Growth Fund has to say about Starbucks Corporation (NASDAQ:SBUX) in its Q1 2022 investor letter:

“We trimmed our positions in most of these companies in 1Q 2022 and sold our stake in Starbucks after a 12+ year holding period. In our view, Starbucks continues to be in a unique position to serve its customers who value the quality of its products and the convenient way they can be purchased. At the same time, Starbucks’ business is maturing in western markets, and its employee and store-related costs are growing, which should lead to slower earnings growth than we would prefer and further P/E multiple compression. We believe we have better opportunities as we continue to assess the impact of these issues for Starbucks.”

Photo by Karlo Tottoc on Unsplash

Our calculations show that Starbucks Corporation (NASDAQ:SBUX) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Starbucks Corporation (NASDAQ:SBUX) was in 58 hedge fund portfolios at the end of the first quarter of 2022, compared to 53 funds in the previous quarter. Starbucks Corporation (NASDAQ:SBUX) delivered a -10.42% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on Starbucks Corporation (NASDAQ:SBUX) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.