The Sex and the Single Girl Portfolio
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Fifty years ago a prescient Helen Gurley Brown wrote, “Being smart about money is sexy.” Amen to that, girlfriend. She died this last week and while most of the attention has centered around her 1962 book, Sex and the Single Girl, and its shocking effect at a time when sex and single in the same sentence was taboo, the truth is a great deal of the book is about attaining financial independence.
Brown did much more than say it was OK for single women to pursue and enjoy healthy sex lives. She antedated Suze Orman by advocating a healthy financial life too. Although, at the time she still felt it necessary to couch her advice to read the Wall Street Journal daily by saying it would give bachelorettes something to discuss with higher-status marriageable men.
Sex and the City may have been all the rage in the ‘90s but Brown surely would have told Carrie Bradshaw to “stop buying the shoes already and buy some stocks.” She was a big believer that every single woman should have a stock portfolio. As editor-in-chief of Cosmopolitan magazine she was an astute businesswoman and wrote that fiscal freedom even helped women have better sex lives because it led to better choices.
So, how should latter day Cosmopolitan readers (and drinkers), the bright young things eking out existences in big cities, position their portfolios? (Note: In honor of Ms. Brown’s passing, from here on the tale will be told in the breathless, confiding, girl talk style she made famous. Italics and double entendres included.)
Seven Sexy Stocks To Make your Portfolio Sizzle
First, thank your lucky stars you can invest online and don’t have to pay the loan shark commissions of the Mad Men era. Buy the companies you know. Buy big companies (we all really know big is better). Buy companies that give you something pretty (they’re called dividends) and buy on sale.
You know these brands, you love these brands: Apple (NASDAQ: AAPL), Starbucks (NASDAQ: SBUX) and Limited Brands (NYSE: LTD), the Victoria’s Secret people. You might also want to buy a few names that may make you think "uggh, boring granny panties" but rather try to consider them as "vintage" or "retro." They are Church & Dwight (NYSE: CHD), which make Trojan condoms and various "pleasure enhancing products," JPMorgan (NYSE: JPM), run by CEO Jamie Dimon (cute in an older man teddy bear way), and General Electric (GE), which you may know for its 49% ownership of NBC Universal, which airs 30 Rock, its self-satirizing send up of GE corporate culture. And lastly if you don’t buy Limited Brands you can buy Macy’s (M) instead. These seven names will leave you free to cuddle with whomever at night rather than tossing and turning worrying about your portfolio.
Oooh, Tell Me More
Wall Streeters refer to hot stocks as "sexy." One of the most shiver-inducing is Apple, which just hit an all-time high on Aug. 17, but think of it as cheap even at $648.19 with a price to earnings ratio (P/E) of 15.23, reasonable for a big tech and a dividend yield of 1.70%. You know the products; you’re probably saving up to buy the iPhone 5. Why not buy the stock instead? It’s only the most successful retailer in America.
Starbucks is a name you’ve known for years. You and your friends probably spend way too much money there...buy the stock instead. For the cost of two weeks of lattes you can buy a share. It’s on sale right now (down almost 20% from its 52-week high) and it pays a dividend of 1.50%. CEO and founder Howard Schulz believes in it with his wallet and owns 17,620,456 shares. Starbucks just partnered up with mobile payment expeditor Square to speed up the process at which people fork over their payment on their Apple or Android mobile devices. While Starbucks disappointed for its third quarter and guided lower citing the European economy, this is a name that is growing with more lines in juices, teas and baked goods.
Victoria’s Secret and Bath and Body Works are two stores likely soaking up more of the single girl paycheck than she’d like to admit. Both are owned by Limited Brands, founded in 1963, and operating 3,320 stores worldwide. You’ve probably also heard of the very popular Pink brand and upscale name Henri Bendel, which they own, too. Limited Brands pays a 2.0% dividend and has a reasonable retailer P/E of 20.58. Unlike your boyfriend, CEO Leslie Wexner isn’t afraid of commitment and owns 19,722,037 shares. Limited Brands just reported on Aug. 15 and is near a 52-week high. Wait for a pullback to buy this one.
Sexy Little Black Dress Stocks
Here are your ’vintage’ stocks, the classic little black dress that never goes out of style that Brown exhorted single women to own. Consumer staple company, Church & Dwight, founded in 1846, makes all those baking soda products that clean your house, keep the kitty litter fresh as well as the aforementioned condoms, etc. Not your grandma’s stock, indeed. Church & Dwight has a 1.80% yield and a P/E of 24.12. They just reported earnings on August 7 and beat analyst earnings per share expectations. Analysts think current value at the mid $50’s is fairly valued as it may see continued pressure from competitors Procter & Gamble and Clorox. Just buy on pullbacks and keep holding.
General Electric is a conglomerate with a 3.20% yield. It may remind you of old timey stock certificates but GE is a leader in energy efficiency and high tech medical innovation. They reported on July 20 a satisfactory but not exciting (we’ve all been there, right?) quarter but they did reaffirm guidance and insiders have been buying shares. Their best bet for growth in the future is their innovative energy and medical tech divisions and exposure to emerging markets. Their weakness is their exposure to real estate, both residential and commercial, through GE Capital and their 20% exposure to Europe.
You’ve probably heard of JP Morgan in the news recently which lost billions on a big bet on synthetic credit derivatives that went horribly wrong. But CEO Jamie Dimon ‘manned up’ and apologized. Don’t you wish more men would do that? JP Morgan is still considered best of breed among the big banks with a 3.20% yield and trading at an 8.55 P/E. Analysts give a price target of $44.00 for 20% upside. Not to mention CEO Jamie Dimon owns 3,226,153 shares and institutions own 75% of shares. Who says banks can’t be cuddle worthy?
You know Macy’s, you know Bloomingdale’s..you love to shop their sales. Macy’s may not be on sale right here but it has a 2.10% yield and a 12.31 P/E. Debonair CEO Terry Lundgren (was he separated at birth from Pierce Brosnan?) owns 399,619 shares and believes in the successful strategy he’s implemented of localizing merchandise at all the stores. Wall Street likes it, too, with institutions holding 92% of shares contributing to the stock doubling in 52 weeks.
Take It Slow, Baby
Remember when you first started wearing stilettos, you didn’t run, you had to take baby steps and practice how to strut you stuff. Learn as much as you can, it’s called due diligence, baby. Buy slowly especially those stocks that are at 52 week or even all-time highs. Buy them on one of those Dow down days when you see stock brokers on the news facepalming or looking up to heaven with agonized expressions. That way you’ll get them on sale. Helen Gurley Brown always said, “Never pay more when you can pay less.” Didn’t Warren Buffett say something like that, too?
But seriously, breathless prose aside, Helen Gurley Brown’s main point was that being smart about money is sexy and you can feel free to have a great life, single or not, man or woman once you are financially independent. You may even find investing to be surprisingly sexy. Oooh la la!
leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, JPMorgan Chase & Co., and Starbucks. Motley Fool newsletter services recommend Apple and Starbucks. 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.If you have questions about this post or the Fool’s blog network, click here for information.