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Three Reasons Starbucks Could Eat McDonald’s

Wednesday, 19 Jun 2013 | 3:54 PM ET

Starbucks plans on expanding its food menu, taking on such breakfast rivals as McDonald's.

It was more than half a decade ago when Starbucks was criticized when it made a push beyond coffee. CEO Howard Schultz, who returned to run the company in 2008, discontinued warm breakfast sandwiches that year. Schultz later said, "We lost focus of what we had – we lost the aroma, we lost our people scooping up fresh coffee from the bins and grinding it fresh in front of the customer."

Well, things have changed since 2008. The company, at $50.3 billion, is now worth nearly four times as much as it was then. Share prices, now above $67, are at all-time highs.

So can it take on McDonald's, worth twice as much and with almost eight times the revenue? Yes, according to CNBC contributor Steve Cortes, Founder of Veracruz TJM. He says there are three reasons why Starbucks is a good buy at these prices.

On the technicals, Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, offers his take on Starbucks' chart.

To hear the three reasons Cortes thinks Starbucks can win and see Ross' charts, watch the video above.

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