Report From the Road
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Whizzing up PA-78 northeasterly, directed to retrieve my kid from college where all students who could go home were advised to do so, was getting very spooky on Halloween. A Batesville funeral casket truck seemed like it was escorting me for over 100 miles, one of those three trailer deals as long as three trucks. Miles of truckstops that normally light the highway were dimmed, no gas. Tiny little gas stations just off the ramp, no gas. It was now going on 50 miles with no gas and I was getting ever nearer to Jersey. Then I remembered Cabela's (NYSE: CAB). Like a beacon on the hill it was and the entire town built around it glittering below with gas stations and fast food, all open. It looked like Sandy was a distant memory here. The parking lot of Cabela's was full as usual but no time to tarry.
Finally I arrived at campus, the campus was darker than any inner-city neighborhood I'd ever seen. Shadowy students were crossing campus using their iPods and iPhones as flashlights. My daughter and her friend told me about the blue flashes that they thought were lightning but were actually transformers blowing out. While she was going to miss the electronic dance on Saturday including a giveaway of an iPad. I was glad to be headed south with her again.
After all the Sandy stories, seeing an entire college virtually lightless with only a few buildings still running on generators and some dorms without heat just got me to thinking about all the marvels of our age and the geniuses responsible: Edison, Jobs, Ford.
And I wondered which stocks would be good for years and years and years.
Apple (NASDAQ: AAPL), of course, was my first choice. Seeing these college kids so tethered to their iPods and iPhones made me realize that an entire generation will be brand loyal to Apple. By the time they graduate if they can get jobs, likely those businesses will have transitioned to Apple's products. These kids will demand it. Well, they may not demand it but they'll suggest to their first bosses that it's a better way to communicate.
Within a few years their younger siblings going to college will have most of their textbooks available as e-books. They, too, will prefer Apple platforms if the parents permit. Despite the changes in upper management I still think Apple is one of the very best stocks out there. The holidays are going to be great for Apple if only they can keep up with demand. Under $600 it's getting mighty cheap with a 13.51 P/E and a yield of 1.80%.
The truck full of Batesville caskets, manufactured by Hillenbrand (NYSE: HI) reminded me that Hillenbrand, not just the biggest distributor of caskets and all things funereal, is also well on its way to being an industrial conglomerate with an inviting yield of 3.80% and a 12.55 P/E. Besides funeral parlor needs, they also have an industrial machinery division, making all kinds of material handling equipment and systems across numerous industries, think grinders, crushers, pneumatic feeders, etc (again, none of that related to the funeral division). It has been on a buying spree of late, acquiring Coperion Capital GmbH of Germany for $300 million (equipment for making plastics) and will be added to its Process Equipment Group with K-Tron, acquired in 2010 and Rotex (separation machines) in 2011. Just this division alone accounts for 66% of revenues and Coperion is expected to be accretive in 2013.
However, this caused Standard & Poor's to cut their coprorate credit rating to BBB- but Stable. Risks to getting in the stock are that Hillenbrand might not be finished in their shopping. In that case new investors could feel some buyer's remorse. Otherwise it is an interesting yield play. It reports on November 26.
Finally, the beacon on the hill, Cabelas, had been a shining star but lost 17% of its luster after its October 25 earning report as analysts had finally jumped on the bandwagon and expected a more thrilling ride. They missed on the topline but EPS were in line. The P/E is 18.29 and analysts are still bullish on the name with expectation for the sporting goods retailer to return to or exceed its 52 week high of $56.78. I've mentioned before that Cabela's is a destination store, much more here, and that the town is built around Cabela's.
Seeing that Cabela's light up the sky, even after Sandy, showed me there are good stocks that will endure, long after we become Batesville customers. (Note: It'a hard to drive next to a casket truck for 100 miles on a very dark road on Halloween and not be a little creeped out.) But Hillenbrand is a good very long term hold, especially if it gets knocked down on a pullback. And Apple is still amazing. When college kids use iPhones as flashlights, I'm a buyer.
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leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Hillenbrand. Motley Fool newsletter services recommend Apple and Hillenbrand. 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.