Tuesday, November 27, 2007

Tim Hortons Stock Up - Starbucks Stock Down

Tim Hortons Stock Up - Starbucks Stock Down

Wow that coffee is hot? Or is it? Why is Tim Horton's (THI) stock doing so well and Starbuck's (SBUX) struggling? Tim's is practically a religion in Canada. I am a huge fan as well. I usually stop in everyday and pickup a coffee. When I visit my customers or one of our factories I like to stop in and pickup some donuts and muffins. So what is the attactions to Tim Horton's vs. Starbucks? Starbucks seemed unstoppable and had perfected the feeling of "I just paid $16 for 2 coffees and 2 hot chocolates but for some reason on feel good about it". On the other hand, when I visit Tim's and get the same order it only 5 bucks.

I bought the stock the day of the IPO. The thing that convinced me to buy the stock was the ever present line of 12 cars in the drive through each morning on the way to work. People like the product. I actually could have bought is at a lower price after the IPO but that is ok. I am pretty happy with the investment so far. The really encouraging thing is that they really are only on the fringes outside of Canada. I think they have like 300 some stores in the U.S. vs. over 2000 stores in Canada.

In keeping up with my home work on the stock, which Jim Cramer always recommends I do. I listened to the 3rd quarter conference call results for Tim Horton's. They have great growth and the finished the first round of a stock buy back and they have annonced a second stock buy back. Also in some recent news Tim's just annouced that theyhave an agreement with Wal-Mart to provide food services in new Wal-Mart supercenters.

Just added a video from Morningstar on Starbucks.

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