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Halftime: Starbucks—Has the Java Joint Gone Cold?

Starbucks shares went higher on Thursday after the coffee giant reported domestic same-store sales increased by 7 percent. But will soaring coffee prices take a toll next year?

Probably not, said Nicole Miller Regan, a managing director and senior research analyst at Piper Jaffray. Regan noted that the Seattle-based company has coffee prices protected through the early months of 2012. Based on her models, Starbucks has room for about 15 percent more upside in coffee prices. She also said the company's transparency about costs offsets part of her concern.

Regan remains bullish on Starbucks because she thinks it's a margin expansion story. Starbucks' consumer packaged goods margin is two times that of a retail store and it's growing double-digits, Regan noted. So despite higher coffee prices, she thinks margins will expand. She said its CPG business alone is worth at least $7 a share.

There are three pieces to the Starbucks story, Regan said. From a margin standpoint, she thinks CPG is the most compelling. Traffic and new unit growth, however, are just as important. Its U.S. comp is at 7 percent, which she thinks is very healthy. Starbucks is getting new unit development internationally.

What's the Trade?

Trader Tim Seymour is also bullish on Starbucks. The EmergingMoney.com founder thinks it has a lot of growth potential.

"They are not saturated overseas like they are here," Seymour said Wednesday. "That's exactly why you want to own Starbucks."

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POPS & DROPS

The Dow and S&P 500 edged up on Thursday, erasing early losses as investors brushed off disappointing economic data and bet on a further in equities. By midday trading, the "Fast Money" traders found these market movers to be the most interesting.

Pops (stocks that went higher)

Citrix Systems (CTXS) popped by 9%: The technology company reported great earnings, Kanundrum Capital founder Brian Kelly said, adding that he currently owns CTXS shares. He thinks it's a good buy at current levels.

PulteGroup (PHM) popped by 4%: Options trader Jon Najarian said pending home sales rose by 5.1 percent in March. He thinks it's a sign homebuilders, like PHM, could be turning around.

Drops (stocks that went lower)

Officemax (OMX) dropped 18%: The retailer's quarterly profit fell by more than half, as corporate customers spent less on office supplies and fewer shoppers visited its stores.

"It's a competitive space," author Stephen Weiss said. "They're very dependent upon deployment growth and we're just not seeing that yet."

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Trader disclosure: On April 28, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss owns (AKAM), (CSX), (VZ), (GDX), (UUP), (TBT), (DVN), (COP), (QCOM), (DE), (JPM), (MSFT), (BTU), Weiss owns (TXN) and (NIHD). Stephen Weiss is short (X). Stephen Weiss is short (AKS). Jon Najarian owns (AMSC), is short (AMSC) calls. Jon Najarian owns (BBBB), is short (BBBB) calls. Jon Najarian owns (AET), is short (AET) calls. Jon Najarian owns (MS), is short (MS) calls. Jon Najarian owns (VHC), is short (VHC) calls. Jon Najarian owns (UA), is short (UA) calls. Jon Najarian is long (ZSL) calls. Steve Grasso owns (AMD), (ASTM), (BA), (BAC), (C), (CSCO), (D), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE) and (PRST).

Brian Kelly
Accounts Managed By Brian Kelly Capital own (GLS)
Accounts Managed By Brian Kelly Capital own (SLV)
Accounts Managed By Brian Kelly Capital own (AGO)
Accounts Managed By Brian Kelly Capital own (BCSI)
Accounts Managed By Brian Kelly Capital own (CTXS)
Accounts Managed By Brian Kelly Capital own (DBA)
Accounts Managed By Brian Kelly Capital own (EBAY)
Accounts Managed By Brian Kelly Capital own (GDXJ)
Accounts Managed By Brian Kelly Capital own (JNPR)
Accounts Managed By Brian Kelly Capital own (LMT)
Accounts Managed By Brian Kelly Capital own (RVBD)
Accounts Managed By Brian Kelly Capital own (PWRD)
Accounts Managed By Brian Kelly Capital own gold futures
Accounts Managed By Brian Kelly Capital own wheat futures
Accounts Managed By Brian Kelly Capital own soybeans futures
Accounts Managed By Brian Kelly Capital own natural gas futures

Steve Grasso
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (MSFT)
Stuart Frankel & Co and its partners own (MU)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

Nicole Miller Regan
Disclosures for universe of: Nicole Miller Regan
(BBRG) and (CCSC) are Piper Jaffray Investment banking clients during the past 12 months.
Piper Jaffray expects to have (BBRG) as an investment banking clients within the next three months.
Piper Jaffray is a market maker in (BAGL), (BBRG), (BJRI), (CAKE), (CPKI),(MSSR), (PFCB), (PNRA), (RRGB), (RUTH), (SBUX), (SONC)
Piper Jaffray usually provides bids and offers for the securities of the following companies and will, from time to time, buy and sell the securities of these companies on a principal basis: CCSC, CMG, DRI, EAT, MCD, MRT

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