Take Profit in Starbucks (SBUX); Sell American Airlines (AAL)
Today I’m recommending that we take a 50% profit in our long position in Starbucks (SBUX). The stock has been one of the better performers in the currently weak market environment, which is somewhat surprising given the economically-sensitive nature of the business. On Monday, the stock came within 50 cents of reaching our initial upside target of 118 on an intraday basis and is up 17% to date. Thus, I recommend that we take a 50% profit in SBUX, and I’m placing a Hold rating on the remaining half of the position. SELL A HALF
I’m also recommending that we sell the remaining half of our position in American Airlines (AAL). We previously took a 50% profit in the stock after its strong performance from November through January, but now the shares have fallen out of favor as the airline industry is looking shaky in the face of an uncertain economic outlook, and with a number of Wall Street analysts downgrading shares of major airliners on high valuation premium concerns. After taking the previous profits, the current exit of our remaining shares gets us out at slightly above break-even. SELL
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