Nibbling on niche opportunities- bought SBUX MXL SWM & BABA

In this very mixed market I’m taking the opportunity to make very small purchases of select stocks to give my portfolio an eclectic growth element.

Here’s a quick overview of what I’ve purchased yesterday and today:

  • Starbucks SBUX- this is obviously an extremely well managed company with excellent income and growth prospects. They announced an earnings miss last week and expectedly the stock has suffered.  It appears to have found support in the mid-50s.  While it can always go lower, over the past 7 years SBUX is a buy when it drops below its 200dma.  I think it’s worth the short term volatility.
  • MaxLinear MXL- is a niche manufacturer of broadband equipment that is very profitable (23.8% profit margins), well managed (zero debt), and double digit top/bottom line growth. Their industry sector has been out-of-favor but the stock has been recovering and now sits above its 50dma.  With excellent growth prospects and a PE valuation of only 12, I think it’s a worthy risk.
  • Schwitzer Mauduit SWM- is a specialty paper manufacturer, primarily serving the tobacco industry. Like Phillip Morris, it’s generally a recession proof business but unlike others in that overpriced consumer staple sector, it’s a very affordable 10PE and pays a hefty 4.6% dividend.
  • Alibaba BABA- a Hong Kong based internet retailor similar to Amazon. This is one of the few Chinese stocks that I believe has an authentic balance sheet; however, I still remain skeptical and therefore only taking an extremely small  It has extraordinary growth prospects, a reasonable valuation of 30PE, virtually no debt, and a 56.6% profit margin.

Be sure to listen to the next episode of the Wealthsteading Podcast where I’ll discuss these stocks and my evolving Minefield Stock Strategy.

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