The following video is part of our "Motley Fool Conversations" series, in which consumer goods editor and analyst Austin Smith discusses topics across the investing world.
Starbucks has been a market darling over the past few years. The coffee slinger has been a multibagger for some, and a still-solid investment for others. But with all that growth, Starbucks has also filled out its multiples, and now sits at a not-so-cheap P/E of 30. In an effort to continue the momentum, it seems that Starbucks is diversifying away from its core-competence — selling absurdly high-margin coffee. Investors shouldn't be worried though. The company's investments in energy drinks, smoothies, and baked goods may result in lower margins, but they aren't a waste of money. They're among a multitude of long-term bets Starbucks is making to keep the company growing.
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A version of this article, written by Austin Smith, originally appeared on fool.com
