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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)