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Why Stephanie Link is watching Starbucks and that stock down nearly 30% year-to-date

Hightower Councilors Stephanie Link believes we are still in the middle of a bull market. As a result, she has identified a few stocks well off their highs that she would like to buy should further weakness emerge.

Starbucks Corp. SBUX is one of the names on his watch list, Link said Monday on CNBC’s “Power Lunch.”

Starbucks has strong sales in the United States, but the company is facing international challenges stemming from rising COVID-19 cases in China, the Russian-Ukrainian conflict and supply chain headwinds, a said Link.

However, she is convinced that the CEO of Starbucks Howard Schultz will be able to navigate these challenges.

“He’s got a tough job ahead of him, but that’s Howard Schultz,” Link pointed out. With more than 35% down year-to-date, Starbucks shares are starting to look attractive, she added.

Since last week: Why this Starbucks analyst says stock valuations are at an ‘all-time low’

Link also monitors an animal health company Zoetis Inc ZTS closely, she said. Animal health care is a $42 billion market that’s growing 10 to 15 percent a year, she said.

“These guys, Zoetis, they actually have the product differentiation, they have the technology they’re implementing, a great balance sheet, they’re buying back stock. They’re doing whatever it takes. The only problem… is it expensive,” Link said.

Zoetis trades around 34 times its forward earnings, according to data from Benzinga Pro. The stock is down almost 30% this year. If this were to pull back further, Link said she was ready to pull the trigger and buy.

SBUX, ZTS Price Action: At press time, Starbucks was down 0.88% at $73.98 and Zoetis was down 2.6% at $172.65.

Photo: sahinsezerdincer from Pixabay.