Media Thinks Starbucks Corporation (SBUX) Will Dominate the Restaurants Industry (Apr-30)

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Based on a sentiment analysis of news headline for Starbucks Corporation (SBUX), it has become clear that the financial media and blogosphere are very excited about the outlook for the stock.

But is this extreme optimism a contrarian sell signal?

Trading on One-Sided Investor Sentiment

Overwhelming consensus on a company can drive stock prices beyond their true fundamental value–understating or overstating inherent risks. These mispricings often present an opportunity for investors willing to go against conventional wisdom.

This is the goal of Contextuall: to identify examples where herd behavior has reached extreme levels.

We believe that, by identifying these areas of one-sided sentiment, investors could use these contrarian signals as a starting point for their own research.

Analyzing Media Sentiment for Starbucks Corporation (SBUX)

Our sentiment algorithm analyzed recent Starbucks Corporation (SBUX) news articles, and 53.0% of headlines have been classified as Positive, higher than the Restaurants industry average of 28.64%.

8.0% of headlines have been classified as Negative (vs. an industry average of 14.68%).

Given the extreme bullishness in the media about the stock, should you be careful? With everyone pushing good news on the company, how much upside is left to price in?

Any comments? Let us know in the comment section to the right.

Sentiment Trends: Charting Sentiment by Company

You can click on the chart below to explore sentiment trends for other major companies, where each dot represents a clickable link to a company page (hover over any dot for summary info).

Positive sentiment percentages are plotted on the vertical axis, while negative sentiment percentages are plotted on the horizontal axis.

In other words, companies in the top left have more optimistic news sentiment than companies in the bottom right.


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