Varchild2008 (84.41)

CBOU is priced to Armageddon!

July 06, 2010 – Comments (0) | RELATED TICKERS: FRED , CBOU

Bare with me in discussing my own STOCK again as I will cover (FRED) that is not in my portfolio later in this post....

1)  CBOU is in my portfolio....and in fact I joined in this morning's crazy initial rally before the huge plummet in CBOU this morning by accumulating 74 shares.... Up 9.5% only to end down over 5% today (a 14.5% pricing move from today's peak!!!).  

2)  Furthermore CBOU simply followed SBUX into the toilet which means this was a SECTOR Sell-off and not necessarilly any attempt to zero in on CBOU as some kind of "LOSER" in the coffee sector.

3)  CBOU at $8.62 does not really appear to be done selling off......  Could go back to a 7 handle if there is enough fear over the JUNE Services number showing that the economy is weakening.

4)  I can personally confirm that my last visit to CBOU at Royal Oak Michigan revealed a stunning lack of energy and excitement at the place....... Not even HARDLY close to the number of people I saw in the CBOU during Q1 of 2010.   This was inspite of their promotion/marketing of their new lineup of Lemonade, Iced Tea Drinks...(DELICIOUS as heck!!)    It didn't feel like a "Break Even" kinda day for the restaurant at Royal Oak Michigan.  *sigh*

5)  So..... we are pricing in Armageddon for the 2nd half of Caribou Coffee which means Wall Street doesn't care at all what the EPS / Earnings / Profit / Revenue were for last year.... So you can just completely ignore anything positive that happened last quarter and focus on the future.

NOW!  I have something to say about a stock NOT in my portfolio (FRED).

FRED dropped BIG as well as if it was a SBUX or a CBOU........ THIS IS NOT a premium priced goods restaurant company.

FRED is a discount merchandiser and a Pharmacy type business.... Unfortunately my opinion is that of a MORON!!!   MORON!!!  so do your own research especially since I do not have a FRED where I can go to and visit.

But I am nonetheless going to raise my "Watch List FRED" alert to a "BUY BUY BUY" alert on FRED if the stock drops to around $9.80 or less.

Get FRED at $9.80 and I feel strongly you'll thank me...  but I haven't visited FRED cause I do not live near one as far as I know.... So I can't channel check this..... So my opinion is rather rather very weak here... Take it for what it is worth.

I believe that when a PREMIUM shop gets obliterated in the stock market.... The DISCOUNT stores should be priced netural to higher depending on P/E and YIELD.