Mr Coffee Looks Good About Now

Anyone except me still use Mr. Coffee and Folgers? Don’t hear too much about either one of them in the market world but when combined they sure do brew up a good cup of java.

But then to be honest I have never had a $5.00 cup of Starbucks coffee either. I was in one once with some friends but while they were ordering all these fancy things I can not pronounce much less spell I only ordered the regular stuff (which was still around $2.00). The ticket for 4 of us that day was just a little over $20.00.

But truth be told a couple of them did have some kind of whipped cream which looked good but this one guy got ripped off even more than I did. At least I got a full cup even if it was just the regular sort of coffee. This guy only got what looked something like a shot glass full. I thought they were giving him like a sample or something but he said it was supposed to be like that.

But folks that was $20.00+ for 4 cups of coffee and that was a few years ago. Today Starbucks reported earnings and seems like a lot of people may be rediscovering Mr. Coffee and Folgers because according to the headlines Starbucks profit dropped a whopping 97%. The closing of under performing stores and the economy is cited as the main reasons.

Starbucks has had a 52 week trading range of $9.16 - $24.40 and closed today at $10.20. Is Starbucks oversold here? I don’t think so. Sure there will be some pressure because of earnings but Starbucks is a company that I have always thought was too expensive and I personally would not be interested in the stock at $5.00 a share ( about the price of one of their fancy coffees ) .

Talk to the average individual consumer on the street that is simply hoping their job is not the next one on the chopping block and see how many of them want to go buy a cup of Starbucks. I don’t think you will get many takers today and probably less tomorrow. And until the economy is back on solid ground I don’t foresee any of these high end specialty retailers doing well.

Granted, people are not going to stop drinking coffee. I know I am not. But I do enjoy my Mr. Coffee and $7.00 per 32oz can of Folgers. And so the point here is although I am not going to stop drinking coffee, I am going to “value”. And I think this is part of the key when looking for 2oversold stocks.

For example take a look at a recent blog about Mad Catz (AMEX - MCZ) . It is a value play on the Video Gaming Market in my opinion. They compete against the likes of Microsoft, Sony and Nintendo in the sense they make accessories for the Video Gaming Industry. It’s a value play in video game industry that could possibly surprise as the economy continues to weaken.

You might also take a look at the metals and mining. In my opinion this sector and some of the companies involved are going to see some upside pressure if the economy continues to weaken as I expect it will. In this sector we have recently blogged about Yamana Gold Inc. (NYSE - AUY).

Value and 2oversold is what we look for here at 2oversold.com and Starbucks just ain’t our cup of tea….err coffee.