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2 Hot Coffee Stocks to Buy, 2 to Avoid -Breaking

by Mike Robinson

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© Reuters. 2 Coffee Stocks You Should Buy. 2 To Avoid

With coffee prices skyrocketing to new levels, it could be wise to add fundamentally strong coffee stocks Starbucks (SBUX) and Restaurant Brands International (NYSE:) to one’s portfolio now. A weaker fundamentals in the coffee industry could lead to a decline. Luckin Coffee These stocks should be avoided immediately. Continue reading. Coffee prices rose by 63% in the past year due to an imbalance between supply and demand. Due to severe droughts and unanticipated frosts in Brazil, as well as delays in shipment, there has been a shortage of supply. But, millennials have shown a high interest in this drink.

Investors’ interest in coffee has remained high, as evidenced by the iPath Series B Bloomberg Coffee Subindex Total Return ETN’s (JO) 31.6% returns over the past six months compared to the SPDR S&P 500 Trust ETF’s (SPY) 9.8% gains. For some time, coffee prices are likely to remain high because of shipping disruptions. According to Trading Economics, coffee is expected to trade at 179.67 USD/Lbs by year’s end.

We believe it would be wise to buy shares in quality coffee stocks Starbucks Corporation, (NASDAQ:), and Restaurant Brands International Inc.(QSR), as they have solid growth prospects. Despite having poor financials, Luckin Coffee Inc. LKNCY (DNUT) and Krispy Kreme, Inc. DNUT (DNUT) should be avoided.

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