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The trading blog

Two stocks, one crypto

This week we look at two stocks and a crypto that have been making headlines for all the right reasons.

➤ Starbucks (SBUX)

➤ Berkshire Hathaway (BRK.A)

➤ Ethereum (ETH)

Starbucks (SBUX)

In its quarterly results, the Seattle-based coffee chain sent a positive message about its recovery as sales in the coffee shop picked up thanks to the vaccination rollout. In the quarter ending March, comparable-store sales grew 15% year-on-year and rose 35% in comparable international sales owing to a surge in shops in China.

In its quarterly results, Starbucks raised its full-year forecast for earnings and revenue. For all of fiscal 2021, the chain expects earnings of $2.65 to $2.75 per share, up from its prior range of $2.42 to $2.62 per share.

Mobile orders have contributed to Starbucks rosy outlook. Late last year, the chain launched its free Stars to Everyone program which allows Starbuck Rewards’ members to earn rewards on their orders without having to preload money onto their account. Rewards members accounted for 52% of sales in the US. 

Due to the pandemic, the coffee shop was slow to develop new sites compared to its guidance to investors, however as the vaccination drive continues to dominate, will 2021 see those dreams realised?

Berkshire Hathaway (BRK.A)

The holding company, Berkshire Hathaway, headed by globally recognised investor Warren Buffet, today named its new CEO and successor Greg Abel. Greg is worth an estimated $484 million thanks to a stake in its privately-held energy subsidiary and was previously Vice-Chairman. 

The investment stalwart Berkshire Hathway last month closed trading at $400,00 per Class A share, the highest-price shares in the stock market. The multinational conglomerate, which includes stakes in insurance, transportation and utility companies, recently released its Q1 earnings. Operating income rose 20% from the same period a year ago while net earnings gained a substantial profit of $11.7 billion in Q1. Since the beginning of the year, shares in Berkshire Hathaway have trended, gaining 18% thus far this year.

Ethereum (ETH)

It’s been a crazy few months for crypto fans from the enormous bull runs to institutional adoption of the digital currency. The second-largest crypto by market cap, Ethereum is known for its decentralised, open-source blockchain with smart contract functionality. The coin on the blockchain – called Ether – is regarded as a popular alternative to Bitcoin and a top choice for investors looking to diversify their portfolio. Ethereum uses advanced blockchain technology, meaning quicker transaction times compared to Bitcoin which has led to it being named Bitcoin 2.0.

Earlier this week, Ethereum’s value rose over $3,400 per coin, passing the $3,000 record high set over the weekend. The popular crypto started the year trading at around $730, meaning its value has jumped by 456% in just four months. This is more than 1,500% since this time last year.

Ethereum has also been heralded as the number one option for purchasing non-fungible tokens (NFT) which have seen a spike this year thanks to celebrities like Emily Ratajkowski who used it to buy back images of herself and DAZN which streams sports. Has Ethereum overtaken Bitcoin as the crypto king or will these two co-exist?

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