Weak Competitors Will Benefit Starbucks (SBUX): Polen Capital

Polen Capital Management, a value-driven, concentrated, long-term investment management firm, published its ‘Polen Global Growth’ fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 7.70% was recorded by the fund for the Q4 of 2020, below its MSCI All-Country World benchmark that delivered a 14.69% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

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. Starbucks Corporation is a global chain of coffeehouses that currently has a $125.3 billion market cap. For the past 3 months, SBUX delivered a 17.46% return and settled at $106.48 per share at the closing of February 5th.

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.”

Last November 2020, we published an article telling that Starbucks Corporation (NASDAQ: SBUX) was in 66 hedge fund portfolios. Its all time high statistics is 68. SBUX delivered a 23.21% return in the past 12 months.

Our calculations show that Starbucks Corporation (NASDAQ: SBUX) does not belong in our list of the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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