Oprah's Favorite Stocks
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Oprah's favorite things list comes out on newsstands on November 6 but I got an email preview of the 49 items she gushes over. (I don't want to offend Oprah too much, I may write a book someday.) This year she's gone a little one-percenter on her fanbase, I'm afraid, but some of her favorites are items from publicly traded stocks. In the past being named an Oprah favorite has catapulted companies into the stratosphere like it did with Deckers. So, imagine I'm shouting Oprah style (although in real life it would sound more like Tina Fey's imitation of Oprah), "Please Welcome MY FAVORITE STOCKS!!!"
The top publicly traded item is the Ralph Lauren Cable V-Neck sweater for $198.00. This isn't going to move the needle for Ralph Lauren and it just reported, anyway. It's already an iconic fashion name, but it is number 6 on her list. However, Miss Winfrey may get a little buzz going about her number 7, the Coach Puffer Jacket, for $458. Winter is coming on and I've gotten other emails from fashionistas about how much they love it. Coach (NYSE: COH) is still one of my favorite stocks with CEO/Founder Lew Frankfort still holding 2,066,449 shares of the stock as of October 12 as well as its 2.10% yield and 16.12 P/E.
Coming in at Number 16 is the Macy's Hotel Collection Bedding from $80-$700. Macy's (NYSE: M) isn't likely to move much, either. Retailers, especially Macy's, seem to be prospering this year and Macy's is the big name in the bunch.
Next at 17 to put under your Macy's bedding is the Tempur-Cloud Supreme Mattress at $2699.00 which Oprah says she has in all her bedrooms. I assume that's in all four properties. This may help out Tempur-Pedic (NYSE: TPX) which is a seriously discretionary stock. Just decking out all Oprah's bedrooms ought to help the top line. It guided lower for the full year on October 25 and took another plunge down 20%. It certainly could use the buzz as it has fallen out of bed since its 52 week high of $87.43.
At number 20 are the Michael Kors Glam Studded High Tops at $198. Michael Kors Holdings (NYSE: KORS) has certainly moved up from its IPO, in fact one of the best performing IPO's of the last year, and reports on November 13. Here's what I think going into earnings.
Here's a surprise: the Microsoft Surface tablet, from $499, was number 22. Oprah loves, loves, loves it! And Microsoft (NASDAQ: MSFT) probably loves it that nary a Google nor Apple product made Oprah's list this year.
As for the rest of the list, all privately held, the takeaway is that Oprah now loves anything with truffles, tequila, and pigs in a blanket, the pricier the better. I'm game, where's the party, Oprah?
So which are the best names from Oprah's list? It's a shame that all her picks are well known names as there won't be that glorious upside from lesser-known names. The two names that might actually get a bounce here (no pun intended) are Tempur-Pedic and Microsoft. For those women thinking of what to do for the holidays, at least in Microsoft's case, who might have been mulling over an Apple, Amazon, Google or Microsoft tablet this might tip them in Microsoft's favor. With all the products and services Microsoft sells this won't be a big mover for them unless word of mouth grows from Oprah's legion of fans saying they love, love, love it, too. Microsoft is not a bad buy here with a yield of 3.10% and only a 16.02 P/E. I know, I know, I still like Apple and Amazon but Microsoft with the Surface and Windows 8 may be a name to explore further.
Tempur-Pedic (and the entire mattress sector) has been bedraggled, stomped on, decimated, you name it. Tempur-Pedic already reported on October 23, and missed on the top line and just met expectations on EPS. Margins sagged (oops, another pun) overall. The company is beginning to look almost like a value play at its P/E of 12.35. But it's so volatile a name and you thought Dendreon was a roller coaster. If only they could get Oprah and Tom Cruise jumping on the mattress, there's your commercial!
Some things in Tempur-Pedic's favor are their plan to purchase Sealy to cover the lower end and middle end mattress market. Chairman of the Board P. Andrews McLane also acquired 100,000 shares worth $2.5 million in June. I like it when there's insider conviction but I trust it more in a case where the stock is trending up like Coach. And that Sealy buy will take some time to finance and be accretive so for right now, I would just watch and wait.
My favorite stocks here would be Microsoft and Coach. Michael Kors is a big grower and I see his purses around but I much prefer Coach's stability and Microsoft is turning out to be quite the surprise mover after years of stagnation. That said, I still like Macy's too, with an indomitable CEO in Terry Lundgren and just a great retailer overall.
Now, Oprah, I still love you, too, even if you have gone awfully high end this year. We're still friends, right? Right?
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leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Coach, Microsoft, and Tempur-Pedic International. Motley Fool newsletter services recommend Coach and Microsoft. 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.