Festivus-Feats Of Strength!!
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Festivus (the holiday for the rest of us as popularized by Seinfeld) is upon us. Only two weeks away! And I'm sure you're polishing the traditional aluminum pole, checking out recipes for the mandatory meatloaf, and flexing your biceps in anticipation of the feats of strength portion of the celebration. This holiday is a good time to check out which companies are winning in the Feats of Strength category in 2012.
The Best Of Us For Festivus
One of the strongest companies this year was a newbie, Michael Kors Holdings (NYSE: KORS) which shortly celebrates its anniversary as a publicly traded company. The company had enjoyed a double as of November 2 and has since pulled back but Michael Kors has beaten expectations every time this year. The Q2 earnings release in November announced sales rose a stunning 74%.
With a 40.89 P/E it's pricey like its glitzy, glam clothes but an 140.90% quarterly earnings growth rate and a 74.40% quarterly revenue growth rate make this name a must-own like the proverbial little black dress. It has a reasonable debt level of only 11.62 million to 312.42 million in total cash. The return on equity at 46.12% is not too shabby either.
Analysts see a 29.22% growth rate over the next five years as Kors designers seem to divine what fickle fashionistas, both male and female, want. Hedge funds love, love, love the name, too with 43 funds owning it, their number one name among apparel stocks. The company is also expanding and plans to open 15 new stores a year in Europe where their sales are especially strong. Quite a surprise to see a fashion company wrestle giants like PVH, Gap, and The Limited to the ground when it comes to growth and performance.
Strong And Healthy
In a sector which has been humbled recently, Panera Bread (NASDAQ: PNRA) has been on a roll (pun intended) with yet another earnings report with greater than 20% rise in profits. The national trend toward lighter, healthier eating is manifest in the success Panera has enjoyed, up 13.13% over the last year when most fast casual names are flat or down lately.
The company has no debt and forward P/E of 22.35. While it doesn't have the "fabulous!" growth numbers of Michael Kors it does have a 19.32% growth rate over the next five years with a return on equity of 22.93% and both quarterly revenue and earnings growth in the double digits.
From its low last December 14 of $130.37 to its high in October of $175 an investor would have had over a 30% return. Since then it has pulled back in sympathy (unfairly, in my opinion) with competitors in the fast casual space like Chipotle Mexican Grill and Buffalo Wild Wings. With 1,625 restaurants in the US and Canada the company still has room to expand and possibly grow overseas.
Competition, however, always looms over this name from privately held chains like Subway or Quizno's as well as mom and pop sandwich shop/bakeries. Starbucks bought a San Francisco bakery this year and already offers treats with its coffee and Dunkin' Donuts is also in the space with sandwiches. Still, people love Panera's cozy comfy atmosphere and food with integrity theme as do socially responsible investors who also applaud the company's Panera Cares mission to relieve hunger in America.
Do Ya Feel Lucky?
One of the most surprisingly strong stocks this year has been gun manufacturer Sturm, Ruger & Co. (NYSE: RGR) up 55% over the last year. Analysts thought the stock would lose momentum after the election, but this one keeps going. In May, orders were so numerous that the company had to temporarily suspend fulfillment as they caught up to demand. Doomsday preppers aside, more women than ever are buying guns and every month the FBI reports higher numbers of gun permit applications than the month before with 154,873 criminal background checks initiated on Black Friday alone. I guess not everyone was shopping at Wal-Mart or Best Buy.
Is America a more dangerous place or are gun buyers hoarding guns in anticipation of some gun control legislation? So far, gun control has been a non-issue despite some horrible shooting sprees over the last few years. Maybe it's a mixture of both but it has benefited both Sturm and Ruger and its competitor Smith & Wesson.
As for fundamentals, the P/E is 17.12, the company has no debt, and it has a 2.60% yield with a 34% payout ratio. Return on equity is 39.47% and the profit margin is 13.84%. The Q3 earnings release was a tour de force with a 57% rise in sales with a strong boost by new products. One warning shot, however, is the short interest is at 42.90% as many believe the gun frenzy is done. This name has had a 76% growth rate over the last five years and could be getting toppy but if you believe in the fiscal cliff and a dark scenario on the horizon then be my guest and buy more Sturm Ruger.
A motley assortment of companies have been winners this year, wouldn't you agree? Hard to believe, but I think Michael Kors and Panera Bread can keep moving up throughout the New Year. If you've owned these names this year you are probably having a very festive Festivus season, my congratulations. Add some truffles to your Festivus meatloaf and drink some good champagne, you can afford it. And finally, Happy Festivus to you and yours.
leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Panera Bread and Sturm, Ruger & Company. Motley Fool newsletter services recommend Panera Bread. 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!