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AroniSmartInvest in Action™: Is It Time for Coffee Beans?
After a steady decline since the beginning of the year, the price of coffee stocks has been on the upward trend over the last three months or so. AronismartInvest in Action™ has flagged the trend based on the stock price movement for the companies heavily influenced by the coffee beans' performance. Among the stocks to watch are:
- Coffee Holding Co. Inc. (NASDAQ: JVA)
- Krispy Kreme Donuts (NYSE: KKD)
- Dunkin' Brands Group Inc. (NASDAQ: DNKN)
- Starbucks Corporation (NASDAQ: SBUX)
Many economic indicators appear to confirm the trend:
- U.S. coffee consumption has been on the rise lately, sending the global demand of coffee and coffee consumption higher and, consequently, driving coffee bean prices higher. According to the U.S. Department of Agriculture U.S. coffee consumption is expected to grow by 1.5% between Oct. 1, 2016 and Oct. 1, 2017.
- Global consumption statistics show that the global coffee consumption is expected to grow at the rate of 1.2% between October 1, 2016 and October 1, 2017.
- Coffee consumption has been increasing at record levels in emerging and developing market economies, due to their expanding middle class in large emerging markets or to government policies that encourage coffee consumption in underdevelopped coffee producing countries, especially in Eastern Africa. Hence, the expected increase in global coffee consumption may push the following five coffee stocks higher.
Coffee Holding Co. Inc.
Coffee Holding Co. Inc. (NASDAQ: JVA), the U.S. leading wholesale coffee roaster and dealer, has jumped significantly, already up by 64% in 2016, mostly during the last 3 months alone. Its momentum may be attributed to the Café Caribe brand, which has gained new markets, including big-box discount stores and a large regional supermarket chain.
Starbucks Corporation (NASDAQ: SBUX) is the largest coffeehouse chain worldwide, with over 24,000 locations in 70 countries, dominating the market with coffee beans, brewed coffee, and coffee-related drinks. Starbucks has managed to stop the erosion observed at the beginning of the year and appears to have started to reverse the trend.
Dunkin' Brands Group Inc.
Dunkin' Brands Group Inc. (NASDAQ: DNKN), with with its 8,000 Dunkin' Donuts locations in the United States and 3,000 in 36 countries around the World is also another coffee giant. After a decline in 2015, its stock has increased by more than 25% since the beginning of the year.
Krispy Kreme Donuts
Krispy Kreme Donuts (NYSE: KKD) prides itself as a retailer and wholesaler of quality sweet treats and coffee and is present in more than 25 countries around the World, with over 1,000 locations. Its stock price has increased by 40% YTD.
Disclaimer: AroniSoft, LLC directly or indirectly owns Coffee Holding Co. Inc.
© 2016 AroniSoft LLC.
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