What Sport Brands and Handbags Have in Common
Tyler is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Sometimes there are companies that no one expects to succeed, and they blow everyone away with phenomenal success. Often, just the opposite happens. There are a few companies that appear to be in a position to have great success in 2012, but there is good reason to be optimistic. From sport brands to handbag manufacturers, there are a number of companies to keep your eye on.
Nike (NYSE: NKE) has performed well recently. They increased dividends by 7%, and shareholders even experienced a 2-for-1 stock split. Yes, the company has slowed down in China and has experienced slightly lower margins, but expect those to rebound. With a 10% increase in revenues last quarter, there is obviously still a demand for the brand. Although the stock only increased 5% last year, it surged close to 13% in the past three months. Despite a fairly low FCF yield of 4.1%, this still appears to be a company worth running after.
If energy is running low for Nike, investors might want to re-energize with Starbucks (NASDAQ: SBUX). With a stock that rose nearly 16% in the past year, there is still room for investors to squeeze in. By 2018, the company plans on opening an additional 1,500 stores in the US. This goes without mentioning the massive international markets in countries like China and India. With the recent acquisitions of Evolution Fresh and La Boulange there is ample opportunity for same-store sales to increase. Though the stock is not cheap (FCF yield of 2.2%), it appears to be even more delicious than the products the company sells.
We've covered sports and drinks, now we need to look at food. Whole Foods (NASDAQ: WFM) is growing in new areas and in established areas (8.7% increase in same-store sales). With management believing the company can triple in size, investors see another stock with room to grow. One advantage Whole Foods has is its advantage with gluten-free items. With ten consecutive years of revenue increases, it is obvious that this company is expanding, despite competitors such as Wal-Mart and Kroger. Whole Foods might not be what people want to eat while watching a Walt Disney (NYSE: DIS) movie, but for dinner afterward, it will suffice.
Disney recently acquired Lucasfilm (the company that made Star Wars) which should bode well for Disney. With 2009 being the only year since 2003 that Disney's revenues have declined, they have a good track record of growth. With a 6.3% increase in capital expenditures, it doesn't appear as though they plan to stop growing. With growing revenues, plans for the future, new acquisitions, and a 25% increase in annual dividends, investors should be on the edge of their seats - and the stock increased 33% last year.
Most women prefer to look classy in public places - and most married men know the amount of time and money this process requires. Coach (NYSE: COH) was founded in 1941, and is currently sold in 1,830 outlet and department stores in twenty countries. Like Whole Foods, Coach has experienced ten consecutive years of revenue increases, with a total increase of 500%. Although Wall Street seems to think the company is in danger with new companies starting up, Coach is increasing sales earnings globally. Though its stock decreased 3.8% in 2012, its FCF yield is 5.6%. Although there is stiff competition, the market for upscale handbags might be bigger than it appears.
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The Bottom Line...
There are good companies in every industry, but these companies stand apart. Companies like Whole Foods and Starbucks are expected to open many new stores in the near future. Disney has acquired new partners in business, and there is a bigger market for handbags than some may think. Other stores like Nike have increased same-store sales dramatically. Whatever the case may be, these five companies are worth looking at very closely. No matter your hobbies, interests, or activities there is a company for you. Don't miss out on the opportunity that they have ceased.
tlwofford has no position in any stocks mentioned. The Motley Fool recommends Coach, Nike, Starbucks, Walt Disney, and Whole Foods Market. The Motley Fool owns shares of Coach, Nike, Starbucks, Walt Disney, and Whole Foods Market. 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!