It’s always easy to assume you missed the boat…
Watching an investment jump on unexpected news can be frustrating. Maybe you thought about buying earlier… But now, if you did, you’d be stuck paying a higher price.
Worse, it might feel like you already missed the easy money.
This is the wrong mindset. The trend is the most powerful indicator for investors. That means when unexpected news sends a stock soaring, it’s usually a good reason to buy.
That’s true for one global brand right now. This stock recently enjoyed its best one-day return ever… But you haven’t missed all the upside yet. Instead, history shows a 36% gain is possible over the next year.
Starbucks (SBUX) has a multidecade history. And it has built itself into one of the best brand names in the world.
Management-consulting firm Interbrand rated this coffee giant as the 48th most valuable brand name in the world in 2023. But Starbucks has suffered in recent years…
The company ran into trouble due to operational inefficiencies and a major slowdown in growth. So in mid-August, management went public with a major change.
On August 13, Starbucks announced that it was firing its CEO and hiring Brian Niccol for the job. Niccol was the CEO of fast-casual chain Chipotle Mexican Grill (CMG) from 2018 until the end of last month, where he directed the company with incredible success.
The market loved the news. Investors were waiting for a shake-up to turn Starbucks around. Shares soared an incredible 24.5% on the day of the announcement. Take a look…
This one-day rally erased months of losses. And if you were thinking about buying the stock before it happened, I bet the sudden move frustrated the heck out of you.
It shouldn’t, though. That’s because this kind of one-day rally is a powerful sign of more gains to come.
To see it, I looked at every one-day rise of 10% or more for Starbucks’ stock. These are rare. They’ve happened just 22 other times in more than three decades. And it turns out, they were darn good opportunities to buy. Take a look…
Starbucks has built a valuable global brand. And that has translated into incredible returns for investors.
The stock has increased at 19.1% per year – roughly double the overall market – since 1992. But you can do even better if you buy after massive one-day rallies…
Similar situations led to 6.9% gains in three months, 22.8% gains in six months, and 36.2% gains in a year. That’s fantastic outperformance. And the stock was higher a year later 86% of the time.
So yes, it’s an easy mistake to assume you missed this rally. But according to history, you didn’t… not at all.
Starbucks is a dominant global brand in the middle of a turnaround. Shares are likely headed much higher in the months ahead… And investors who act could see fantastic gains.
Good investing,
Brett Eversole
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Source: Daily Wealth