Invest Like a Bro
Calla is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Bros are there for you, man. Particularly at this time of year, it’s one of your bros who will meet you at the bar when you’ve overloaded on family, or watch a game with you stranded in your snowed-in, small-town hometown. You can always count on your bros, and you probably wish you could count on your portfolio in a similar way. Yet bros, like portfolios, can be impulsive and unpredictable. In that spirit, here are four stocks with tickers paying homage to bros for you to check out in 2013.
From tap out to tap that, "tap" is a versatile word in the bro lexicon. Today, we’ll look at the beer-related realm of TAP, with Molson Coors (NYSE: TAP). Along with Anheuser-Busch, TAP dominates the American beer market, with 75% of the market between them. By price-to-earnings ratios, TAP is the cheapest beer company selling to the American market, with a PE of 14 to Anheuser-Busch’s 19. Its yield of 3% also gives you enough change every year for a couple of brewskies. Even better, Coors and Coors Light are the bro beers and a staple of all frat parties, while Molson is the Canadian bro equivalent, and Blue Moon is a nod to the pickier bros -- and with their 2005 merger, they’re all tight bros! TAP may be the perfect bro stock.
All the internet broz use z’s instead of s’s and CARZ may be the ideal stock for them. The First Trust NASDAQ Global Auto Index Fund (NASDAQ: CARZ) is the only international equity exchange traded fund that tracks the NASDAQ OMX Global Auto Index, which tracks global auto company performance. The fund has all the car stocks you could want, from Ford to BMW to Toyota to Porsche, for a total of 35 companies. CARZ trades at 1.06 times book value but CARZ’s expense ratio is .70%, a bit higher than the average ETF expense ratio. The fund came into being in May of 2011, so its performance history is limited, but in the last year it has had market beating returns of 19.30%; in comparison, the MSCI World Index is 13.01% year-to-date and the S&P 500 is up 8.65%. Will car companies and CARZ make your portfolio zoom in 2013?
If you’re a bro, you know that the right way to spell hot when applied to anything other than temperature is “hott.” Thankfully, NASDAQ has a ticker for that. While Hot Topic (NASDAQ: HOTT) may not seem like a bro stock, many a bro has fond teenage memories of Hot Topic, since the store sold all the cool Blink-182, Greenday, and Teenage Mutant Ninja Turtles stuff. With a PE of 25, HOTT is moderately expensive for a clothing retailer but it comes with a nice 3.4% yield, and its third quarter results showed earnings per share growth and improved margins. However, the company has had negative revenue growth for the last five years. Will you go back to high school with HOTT, or leave those memories in the past?
Finally, PEP is usually associated with cheerleaders, but most bros are just as excited about and definitely louder in their support for games. And if a bro doesn’t have a TAP product in his hand during a game, you can bet that he has a soda, likely of the Pepsico (NYSE: PEP) variety. Together with Coca-Cola, PEP dominates the massive international soft drink market. The company is a mature mega cap, but it is still growing: PEP clocked 15% revenue growth in the last year and has 12% revenue growth over the last five years. Even with the company’s stability and steady growth, PEP’s has a moderate PE of 18 and a great yield of 3.2%. Can PEP pump up your portfolio? Or will you rely on a different bro stock in 2013?
CallaMarie has no positions in the stocks mentioned above. The Motley Fool owns shares of PepsiCo. Motley Fool newsletter services recommend PepsiCo and Molson Coors Brewing Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!