$SBUX Percolating A Monster Gap : The HVCU Concept & Accumulating Managers
$SBUX 's HVC undercut (HVCU) was in line with the average & an Institutional concept of "Accumulating Managers" as expressed by William Danoff of Fidelity Contra fund back in a 2016 interview is likely at play here as well. I have applied this concept to a few situations over the years, and Danoff is certainly not the only PM that thinks and acts in that manner.
https://www.wsj.com/articles/BL-MBB-54710
From such meetings, says Mr. Danoff, “you accumulate executives.” When a favorite manager moves to a new company, he often invests there, too.
FCNTX currently has .25% AUM invested in $CMG with 5.72mm shares. They own exactly 0 shares of SBUX currently, but based on the gap reaction on the news of Brian Niccol leaving CMG to go and be the CEO of SBUX one could assume Danoff bought shares to the tune of an amount that helped drive the gap up yesterday and held the HVCU to normal today.
$SBUX HVC was 95.90 and a -5% HVCU would've been at 91.10. I was watching that level today and took a trade against it earlier in the session. Later it came down a little closer to it at 91.43 the lod and then triggered an excellent trade through 91.90 and ran for 8.29R at the peak only showing .07 of drawdown after the signal on an R of .44. Sizing protocol was 20.8% aum. Why this stuff is important because applied intraday you can get better risk entries with more size based on ATR. ( There's a private video presentation and spreadsheet inside of TickerMonkey's Chat which shares this set up and strategy for sizing and money management. It has turned around the performance of many and enhanced the performance on others who were already performing at a high level.)
Danoff knows the SBUX story well and speaks about it in this interview.
https://podcasts.apple.com/us/podcast/will-danoff-on-innovation-and-investments-podcast/id730188152?i=1000490923753
My partner, John Pocorobba @JPoco722 , on our https://www.tickermonkey.com/erxgapworkshop (still available to purchase) explains a little here in this public presentation about HVC Undercuts ( HVCU ) and what is normal to watch for with the ones that turn out to be the biggest winners. This example is speaking to Power Earnings Gap names, but the numbers apply to all gaps. This data has been further re-validated by a new Gap Study 2.0 Database we've developed with +3500 names and 68 parameters. We have algorithms running against this database daily in real time.
https://www.youtube.com/live/NhpCH4ZHy-s?si=CzCj4VgIPXv54fUP&t=36671
HVCU averages for PEG names
https://www.tickermonkey.com/erxgapworkshop HVC Summary Insights
Grok generated image of Gorilla having a SBUX and Accumulating a Manager