MONEY stocks

Everything You Need to Know to Give Stocks for Christmas

Rolls of stocks with gold bow wrapped around them like a present
MONEY (photo illustration)—Li Jingwang (bow); Kord.com/Getty Images (stocks)

Introducing a youngster to the world of investing via shares in a company they know and admire could start them on the road to wealth

Before you resort to the Starbucks gift card for the collegian in your life—again—or an Apple gift card for the hip techster in the family, why not consider giving a share of Starbucks STARBUCKS CORP. SBUX -0.7372% or Apple APPLE INC. AAPL -0.7723% stock? Looking for that je ne sais quoi for a Frozen fanatic/sports geek/theme park devotee? A share or more of Disney THE WALT DISNEY CO. DIS 0.3023% , parent of the ESPN Network, plays to those passions.

Anyone who had received shares of those stocks five years ago has more than tripled her money, making stocks one Christmas or Chanukah gift that can keep giving well after the holiday season is past.

It’s true that giving shares of a single stock violates all principles of diversification. But c’mon, it’s a heck of a lot more engaging for a child or young adult than some shares of, say, the Vanguard Target Retirement 2060 mutual fund VANGUARD CHESTER TAR RETIR 2060 VTTSX 0.349% .

And maybe, just maybe, introducing a youngster or young millennial to the world of investing via some shares in a company they know—and like—tip the scale toward stocks when they eventually start investing in a 401(k) or Roth IRA. Millennials have been slow to embrace stocks. That’s understand given the fact they and their portfolios had to live through the financial crisis. But it also will make it harder for them to reach their long-term savings goals.

Your first gift-giving task is to choose one of these three ways to gift the stock:

1) Make A One-Time Gift, Stock Certificate Included. Sites such as giveashare.com and uniquestockgift.com allow you to purchase a share that comes with a framed stock certificate, which gives the recipient something more tangible than a brokerage statement to hang on to, and hang up. The certificate may be a real-deal stock certificate or a replica. For example, in 2013 Disney, with its fab animated stock certificate featuring Walt, Mickey Mouse, and Donald, stopped issuing the real deal, choosing instead to register owners only electronically. But you can still get a collectible version of the stock certificate:

There’s a steep price to pay for being able to hand over a physical gift. At giveashare.com a framed copy of one share of Apple was recently $214, a staggering $100 more than the share price of Apple. At uniquestockgift.com the pricing is more a la carte. On top of the share price, you will pay a $69 transfer fee, and anywhere from $2.95 to $48.95 for a frame. A customized engraved plaque will run another $6.

2) Transfer Stock You Own. You can have stock you own transferred to another account. Contact your brokerage and ask for a stock transfer form. For recipients under the age of 18 the transfer must be made into a custodial account with an adult (usually a parent) listed as the custodian.

3) Deal Directly with the Company Whose Stock You Want to Gift. Some companies, including Harley-Davidson, Mattel, and Nike, offer direct stock purchase plans, and you can have dividends automatically reinvested in more shares. FirstShare, an online site that offers dividend reinvestment programs (DRIPs) has a list of companies offering direct investment. Fees vary at each company. For example, Harley-Davidson HARLEY DAVIDSON HOG 0.5587% will let you get started with just a one-share purchase. In addition to the share price itself, there’s a $5 purchase fee plus another 10 cents for each share.

Once you’ve decided how to give the shares, you’ll want to pick a company that both taps into the recipient’s interests and has at least some potential to grow over time. Because the major indexes are at or near all-time highs right now, screaming deep-discount values are hard to come by these days. But the following gift-friendly stocks all offer value compared to the 1,500 stocks that Morningstar closely analyzes, which on average currently sell for 4% more than the estimated “fair value.”

Kids’ Play

Both Disney THE WALT DISNEY CO. DIS 0.3023% and Mattel MATTEL INC. MAT -6.4123% currently trade at small discounts to Morningstar’s fair value estimates.

Movie Buffs and Binge Watchers

Having shed about $100 in its share price since this past summer, Netflix NETFLIX INC. NFLX 1.7044% is currently priced at an 11% discount to Morningstar’s fair value price of $386.

Coffee Lovers

Starbucks STARBUCKS CORP. SBUX -0.7372% recently traded at about an 8% discount to fair value.

Budding Buffetts

If there’s someone on your gift list who has shown more than a passing interest in how stocks/markets/investing works, a share of Berkshire Hathaway is one of the best ways to learn through ownership. Anyone can read Warren Buffett’s annual shareholder’s letter, but reading it as a fellow shareholder will likely resonate more. Berkshire Hathaway B shares BERKSHIRE HATHAWAY INC. BRK.B -0.7271% recently traded around $150 a share, a slight discount to Morningstar’s $157 fair value estimate. (And if your gift goes to someone with a car, Berkshire Hathaway shareholders are also eligible for an 8% discount on GEICO insurance. GEICO is a wholly owned subsidiary of Berkshire Hathaway.)

Tech Enthusiasts

You know Microsoft MICROSOFT CORP. MSFT 0.2946% for its Windows and Office software. If you’ve got a gaming fan in the family they know Microsoft for its wildly popular Xbox console. In the most recent quarter, Microsoft sold 2.4 million more Xbox units. The stock recently traded right around fair value. Apple APPLE INC. AAPL -0.7723% requires a little bit more faith, as the current stock price is at a 14% premium to Morningstar’s fair value estimate. That’s not nose bleed territory, but whoo-boy, the time to buy Apple was last Christmas or Chanukah, when the stock price was nearly 40% lower and the price/earnings ratio was below 14. Today it’s a more expensive 17.4. Unless you have a crazed Android devotee, Google GOOGLE INC. GOOGL 1.0532% doesn’t have the tactile product-connection you get from Apple and Microsoft. But it’s actually the best value of the bunch right now, trading at nearly a 4% discount to its estimated fair value. (That said, a single share is north of $500.)

Social Media Mavens

Twitter TWITTER INC. TWTR 0.9529% trades a slight discount to fair value. Facebook FACEBOOK INC. FB 1.8878% , by contrast, is near a 30% premium — not an easy price to “Like.”

TIME Retail

Go Inside Starbucks’ Wild New ‘Willy Wonka Factory of Coffee’

Founder Howard Schultz shows us his new concept for the future of the coffee chain

On Dec. 5, founder Howard Schultz debuted part of his new strategy for Starbucks: his first flagship “Roastery,” a 15,000 square foot space that is both a coffee roasting facility, and a consumer retail outlet. The place is to coffee what FAO Schwartz is to toys or Dover Street Market is to fashion—retail theatre. You can watch beans being roasted, talk to master grinders, have your drink brewed in front of you in multiple ways, lounge in a coffee library, order a selection of gourmet brews and locally prepared foods. (The entire store is crafted from Made in America materials, by regional artisans.) The architecture says “niche” not mass, as does the merchandise—copies of the New Yorker are scattered alongside top of the line espresso machines and bags of reserve beans marked with their crop year.

Schultz calls it his “Willy Wonka factory of coffee,” and it speaks to the fact that in retail, as in nearly every aspect of the economy these days, there seems to be two directions—up, or down. At the Roastery, a latte made from beans cut and roasted in front of you only minutes before can cost more than $6 bucks. And the truth is that they could probably charge a lot more. There’s little price sensitivity for the upscale consumer these stores—and the smaller “Reserve” stores inspired by the flagship, which will be coming to a town near you in 2015—will target.

For more, click here.

TIME Retail

Inside Starbucks’ Radical New Plan for Luxury Lattes

An employee pours milk into a cardboard coffee cup inside a Starbucks Corp. coffee shop in London on June 9, 2014.
An employee pours milk into a cardboard coffee cup inside a Starbucks Corp. coffee shop in London on June 9, 2014. Bloomberg/Getty Images

Your Starbucks is about to change radically—get ready for $6 coffee

If there is a retail proxy for America, it must be Starbucks. The company has 12,000 stores in the US, doing 47 million transactions per week, serving 70 million unique customers. One in eight people found a Starbucks card in their Christmas stocking last year. So when Starbucks founder and CEO Howard Schultz says something about consumers, people tend to listen. (Indeed, everyone from President Obama to the heads of major investment banks have been known to ring him for a cup by cup read on the state of the economy.)

At the company’s biannual investor conference this week, Schultz gave his take on the state of the recovery in the US. While Schultz is bullish, laying out some robust growth targets for his company, he also said, “We are living at a time when the world is very fragile, and that effects consumer confidence.” Just like the overall economy, Starbucks is bifurcated—stores in some affluent cities are doing more business than ever, while others have yet to spring back from the last several years of crisis and recession.

What’s more, the way people are shopping is changing profoundly. According to Schultz, the “seismic shift” in consumer spending from bricks and mortar retail outlets to online shopping that the company first noted last year has become “a tidal wave.” That’s going to change the entire nature of retail and public spaces. As Schultz put it, “I wouldn’t want to be a mall operator five to ten years from today,” referencing the fact that foot traffic in malls and in Main Street shopping areas throughout the country is way down from last year.

The problem is, that’s where most Starbucks today are located. Solution: a whole new approach to stores that mirrors this new economy. Just as fashion brands have “haute” couture and mass market lines, Starbucks will now have luxury “reserve” stores, and many more express kiosks, mobile coffee trucks and all kinds of specialized retail outlets purpose built for specific spaces. Think luxe roadside coffee pit-stops, or “hammerhead” shaped drive through outlets made out of used cargo containers that will sit in the entrance to highways or on small silvers of land near a bowling alley or another local attraction.

The idea will be to make Starbucks a destination in and of itself, one that’s not so dependent on foot traffic. “People are still longing for connection, and a sense of community, perhaps more so now that they are spending more time at their computers, or working from home,” says Schultz. But in order to preserve the “third place,” Schultz says the company will increasingly have to offer “experience, rather than just a product.”

On Dec. 5, Schultz debuted part of the new strategy—his first flagship “Roastery,” a 15,000 square foot space in Capitol Hill, Seattle that is both a coffee roasting facility, and a consumer retail outlet. The place is to coffee what FAO Schwartz is to toys or Dover Street Market is to fashion—retail theatre. You can watch beans being roasted, talk to master grinders, have your drink brewed in front of you in multiple ways, lounge in a coffee library, order a selection of gourmet brews and locally prepared foods. (The entire store is crafted from Made in America materials, by regional artisans.) The architecture says “niche” not mass, as does the merchandise—copies of the New Yorker are scattered alongside top of the line espresso machines and bags of reserve beans marked with their crop year.

Schultz calls it his “Willy Wonka factory of coffee,” and it speaks to the fact that in retail, as in nearly every aspect of the economy these days, there seems to be two directions—up, or down. At the Roastery, a latte made from beans cut and roasted in front of you only minutes before can cost more than $6 bucks. And the truth is that they could probably charge a lot more. There’s little price sensitivity for the upscale consumer these stores—and the smaller “Reserve” stores inspired by the flagship, which will be coming to a town near you in 2015—will target.

In America these days, there are two kinds of people: those that can buy lattes, and those who make them. Schultz is endeavoring to change both their lives.

Read next: How to Win Free Starbucks for Life

MONEY Fast Food

Starbucks Launches Mobile Ordering So You Can Skip The Line

Starbucks is rolling out a mobile ordering system that will allow customers to place an order on the go and skip the line at pick up.

TIME Starbucks

Starbucks Drinkers in This City Can Now Order Lattes On Their iPhone

An employee pours milk into a cardboard coffee cup inside a Starbucks Corp. coffee shop in London on June 9, 2014.
An employee pours milk into a cardboard coffee cup inside a Starbucks Corp. coffee shop in London on June 9, 2014. Bloomberg/Getty Images

The coffee maker is about to take a massive leap in the mobile payment race

Starbucks’s latest iPhone app update lets customers in Portland, Oregon order and pay for their beverages right on their smartphone.

Portland customers will now see a new “order” button in their Starbucks iPhone app. Hitting it will transmit their order to the nearest barista, while simultaneously processing payment for the drink and estimating a pickup time.

Starbucks said the new payment system will roll out to more cities and Android phones in the “coming months.”

The update, which lets users bypass Starbucks’ register lines, marks the first phase of the company’s ambitious plan to eliminate those lines completely. Executives say mobile ordering could open up even faster ways to get coffee out of the door.

Starbucks CEO Howard Schultz recently said the company would begin experimenting with deliveries of hot coffee as early as 2015, CNN reports. “That’s our version of e-commerce on steroids,” Schultz said during an October earnings call.

TIME Food & Drink

How to Win Free Starbucks for Life

The Ultimate Starbucks Card Starbucks

10 customers in the U.S., 3 in Canada and 1 in the U.K. will score the big prize

Have you ever scored a free drink coupon from a coffee shop and fantasized about using it again and again without it ever expiring, entitling you to a daily cappuccino, iced coffee or whatever you’re in the mood for on any given morning? That dream has literally come true.

Starbucks for Life is now a thing, and 14 people in the world will win it, the company announced Tuesday. From now until Jan. 5, customers can enter the coffee giant’s “It’s a Wonderful Card Ultimate Giveaway.” Ten customers in the U.S., three in Canada and one in the U.K. will score the big prize, which includes a personalized 10K hammered gold Starbucks card.

The contest also features 482,000 instant prizes like free holiday beverages and treats, but if you’re as intent on scoring lattes for life as we are, here’s what you need to know:

- To enter, make a purchase at your local store (the nearly-eradicated eggnog latte, perhaps?) using a Starbucks card or the Starbucks mobile app. You’ll receive a unique sweepstakes code on your receipt that can be entered online at starbucks.com/play for your chance to win.

- The grand prize has an estimated value of $54,000. (That’s a lot of those little vanilla scones).

- The gold card itself is worth $5,000 and comes engraved with the winner’s name.

- “Life,” according to the contest, is 30 years. So if you’re on the younger side, don’t expect to score a venti soy chai tea latte every day until you’re 90.

- You can enter up to two times a day using two different entry codes from the bottom of Starbucks receipts.

- The 10K gold card is suitable for framing, not for your wallet. Instead, a free reward will be loaded on to the winners’ My Starbucks Rewards Gold Card daily, which translates to one free beverage or food item. So, as cool as it would be to present that gold bad boy at the register, your prize will be protected and can’t easily be stolen. Yes, we asked, because yes, we’re planning on winning one.

This article originally appeared on People.com

TIME Money

Millennials Will Make These 15 Companies Tons of Money

Bags of tortilla chips sit in a row at a Chipotle Mexican Grill Inc. restaurant in Hollywood, California on July 16, 2013.
Bags of tortilla chips sit in a row at a Chipotle Mexican Grill Inc. restaurant in Hollywood, California on July 16, 2013. Patrick T. Fallon—Bloomberg / Getty Images

Where Millennials choose to spend their money could pay off serious dividends

The question on every Wall Street trader’s mind these days: “What do millennials like?”

Or at least it should be, according to a new report released Tuesday by Morgan Stanley’s equity strategy team. The report paints a pretty compelling picture of the millennial generation’s spending power five years out.

First, in terms of sheer size, millennials outnumber baby boomers as the largest demographic group. But more importantly, they are aging into some of the spend-happiest years of their lives. In the average lifecycle of the American shopper, spending tends to spike between the ages of 25 and 39:

Screen Shot 2014-11-18 at 3.54.45 PM
Morgan Stanley Research

 

Where they choose to spend that money could pay serious dividends to a few savvy stock pickers. Which brings us back to the question, “What do millennials like?”

“Fast casual dining, hotels, buying online, gaming (social and online, less so casinos), eating organic and healthy, and working out more,” writes Morgan Stanley’s consumer stock researchers. They winnowed down a shortlist of 15 companies that hit those millennial sweet spots, and presented them as a “millennial basket” for investors’ consideration before the flood:

Screen Shot 2014-11-18 at 3.52.44 PM
Morgan Stanley Research

 

 

 

 

MONEY food and drink

Here’s Why Starbucks Will Just Keep Growing

Customers line up at a Starbucks Coffee in New York.
Mark Lennihan—AP

Starbucks is moving quickly in pursuit of several major growth opportunities.

Over the past two decades, Starbucks Corporation STARBUCKS CORP. SBUX -0.7372% has become almost synonymous with coffee. Today, Starbucks operates more than 20,000 stores across dozens of countries.

Considering how large Starbucks has become, it might seem that the company’s rapid growth can’t continue much longer. However, that couldn’t be further from the truth. Starbucks has plenty of opportunities to continue growing at a healthy pace for decades to come.

Starbucks wraps up a strong year

Starbucks recently reported its financial results for the 2014 fiscal year, which ended in late September. For the full year, Starbucks added 1,599 stores to its worldwide footprint and comparable store sales rose 6%. That boosted revenue by 11% to more than $16.4 billion.

Starbucks’ full-year adjusted EPS grew 21% year over year to $2.66, helped by strong margin performance. The company also projected that adjusted EPS will reach $3.08-$3.13 in fiscal year 15, which translates to 16%-18% growth.

Growing beyond coffee

One big growth initiative at Starbucks has been boosting non-coffee sales. In 2012, Starbucks purchased Bay Area bakery La Boulange in order to add more food items to its menu.

The chainwide rollout of La Boulange food items has been bumpy — some customers preferred the old Starbucks bakery selection — but it has still been successful overall. Food sales have been growing at a faster pace than the rest of the company, driven by strong sales of breakfast sandwiches. Starbucks recently added new lunch sandwich offerings to stimulate additional growth.

Starbucks is also starting to expand its Starbucks Evenings concept. Starbucks began testing the sale of wine, beer, and small-plate appetizers after 4 p.m. at a single Seattle location in 2010. The company has since expanded the pilot to several dozen locations.

Starbucks plans to add hundreds of Starbucks Evenings locations in 2015. In the long run, thousands of Starbucks stores could feature the Starbucks Evenings menu, driving strong sales growth in the less busy late-afternoon and evening hours.

Lastly, Starbucks has been doubling down on tea since the acquisition of Teavana in late 2012. Globally, tea is even more popular than coffee, and it represents a $90 billion market. Starbucks is adding tea bars to existing Teavana stores to boost sales of prepared beverages. It is also selling certain Teavana branded beverages in Starbucks stores.

These investments are starting to pay off, as Starbucks saw more than 20% growth in iced tea sales over the summer. Ultimately, CEO Howard Schultz wants to make Teavana the Starbucks of tea, and sees a tremendous growth opportunity there.

Mobile order and pay

Starbucks revealed yet another potential game changer last month when it announced plans to roll out mobile order and pay functionality chainwide in 2015. Customers will be able to place orders in advance and pick up their orders without waiting in line. Starbucks describes it as the urban answer to the convenience of drive-through.

Beginning next year, Starbucks will also use this platform to offer delivery in some top urban markets. Schultz’s vision is that a customer could place a standing food or drink order and have it delivered to his or her desk every day. If this concept takes off, it will represent a huge long-term differentiator — and growth driver — for Starbucks.

Lots of ways to grow

Starbucks is moving quickly in pursuit of several major growth opportunities. Investors should recognize that some of these growth initiatives are bound to be more successful than others.

However, the bottom line is that Starbucks has lots of irons in the fire, and many paths to producing significant long-term growth. (In addition to the store-based initiatives mentioned here, Starbucks is rapidly growing its consumer packaged goods business.)

Starbucks shares currently trade at about 25 times projected 2015 earnings. That still represents a premium to the broader market, but one that is easily justified by Starbucks’ numerous growth opportunities and its leading position in digital engagement. For long-term investors, Starbucks stock could be a great bargain today.

TIME Food & Drink

Starbucks Says It Has Nothing to Do With a High-Profile GMO Lawsuit

Sandy Roberts
Sandy Roberts, Starbucks strategy manager for global coffee engagement, pours samples of coffee for shareholders and other guests at Starbucks' annual shareholders meeting in Seattle on March 19, 2014 Ted S. Warren—AP

Coffee chain issues denial after rocker Neil Young urges boycott

Starbucks has announced that it has nothing to do with litigation being brought against the state of Vermont over the labeling of genetically modified ingredients (GMOs).

Canadian rock legend Neil Young attempted to launch a boycott of Starbucks on Sunday, accusing it of joining forces with Monsanto “to sue Vermont, and stop accurate food labeling.”

Last spring, Vermont passed a law requiring all products containing GMOs to be properly labeled by July 1, 2016, reports People.

Young’s belief that Starbucks was part of a suit to have the law declared unconstitutional prompted him to declare on his website: “I used to line up and get my latte everyday, but yesterday was my last one.” He then appealed to the public to join him in a Starbucks boycott.

However, it looks like it could all be a storm in a coffee cup. The coffee giant released a statement denying that it is involved in the litigation.

“Starbucks is not a part of any lawsuit pertaining to GMO labeling nor have we provided funding for any campaign,” the statement says. “Starbucks is not aligned with Monsanto to stop food labeling or block Vermont State law.”

Young has yet to respond.

[People]

MONEY Food & Drink

These Coffees Want To Be the Christmas Version of the Pumpkin Spice Latte

Seasonal drinks from Dunkin Donuts
Jim Scherer

Can the pumpkin spice latte phenomenon be repeated, only in winter? Starbucks, Dunkin' Donuts, and others hope so—and they're heaping on sugar, ginger, cinnamon, and chestnut flavors into new drinks to make it happen.

It’s no wonder coffee chains are trying to replicate the retail magic that appears annually in the form of autumn’s onslaught of pumpkin spice beverages. A hot seasonal beverage is proven to juice sales big time. To milk the PSL (Pumpkin Spice Latte) frenzy even more, Starbucks rolled out the beverage earlier than usual this past summer in many parts of the country, and it boosted sales to the surprise of no one.

Peppermint, which is known to increase physiological arousal and heightens alertness, has been a popular flavor in holiday season beverages, and Coffee Bean & Tea Leaf, McDonald’s, and 7-Eleven, among many others, are bringing peppermint-laced hot drinks back to their winter menus. But the new holiday beverages go far beyond a mere minty twist, with chestnut, cinnamon, gingerbread, sugar cookie, and other sickly sweet flavors providing the rush. (Perhaps that puzzlingly catchy Def Leppard song was really about holiday season coffees?)

When done right, a hot seasonal beverage succeeds for the seller two-fold by 1) drawing in customers early and often, at least partially because any limited-time offer won’t be around forever and people don’t want to miss out; and 2) getting customers to pay more than usual for their caffeine fix. As NPD Group analyst Bonnie Riggs explained of all unique coffee beverages, customers “expect to pay a premium because the specialty drinks … are not something they can replicate at home or easily get at retail.”

All of which helps explain why Starbucks, Dunkin’ Donuts, and others have introduced these new contenders for the 2014 winter season:

Starbucks Chestnut Praline Latte
In the same way that pumpkin spice has come to be the dominant, most eagerly anticipated flavor of fall, Starbucks is hoping its brand-new Chestnut Praline Latte becomes inextricably tied to the winter holiday season. “The rich, earthy, sweet, roastiness of chestnut is a perfect foil to espresso. Then we balanced the nutty chestnut flavor with brown sugar and spice,” Starbucks research and development manager Amy Dilger said of the new latte, which is the company’s first new holiday beverage in five years. “It’s a quintessential flavor of the holiday season.”

To get customers to sample the goods early in the season, Starbucks is having a buy-one, get-one-free special on holiday drinks, from 2 p.m. to 5 p.m. through November 16.

Dunkin’ Donuts Sugar Cookie Latte
Less than a week after Halloween, Dunkin’ Donuts introduced its lineup of sugary winter beverages, including two cookie-flavored lattes: the Sugar Cookie Latte and the Snickerdoodle Latte. They’re both available in hot or cold varieties, as is Dunkin’s Peppermint Mocha, which is back again this holiday season.

Caribou Coffee Gingersnap Cookie Mocha
With “hints of ginger, allspice and clove,” the Gingersnap Cookie Mocha from Caribou Coffee is trying to make its case as the hot caffeinated beverage of the season. Previous seasonal brews also are returning to Caribou’s menu, including the Ho Ho Mint Mocha and special Reindeer Blend coffee—and thank goodness the latter is false advertising. (The coffee contains no real reindeer ingredients, but does have “a hint of caramel and a dash of spice.”)

Peet’s Cinnamon Hazelnut Latte
Peet’s is bringing back holiday beverages such as the Sea Salt Caramel Mocha, Eggnog Latte, and Winter Solstice Tea, while also introducing a new seasonal beverage, the Cinnamon Hazelnut Latte. Follow the link for a coupon granting a free small seasonal beverage with the purchase of any food item, now through November 26.

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