CHICAGO, June 30, 2011 /PRNewswire/ -- Today, Zacks
Investment Ideas feature highlights Features: Harley Davidson (NYSE: HOG), Krispy
Kreme (NYSE: KKD), Buffalo Wild Wings (Nasdaq: BWLD),
Foot Locker (NYSE: FL) and Dick's Sporting Goods
(NYSE: DKS).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Guys: Buy What You Know
When it comes to investing, we often opt for stocks we know.
Ones we understand and most often those are the companies that we
use regularly.
Why That's a Good Thing
A big part of choosing good stocks is a consistent demand for
their products. They also have to be profitable of course, but the
first step is knowing where that top line on the balance sheet
actually comes from.
Figuring out which drugs are getting FDA approval or which
complex technological advancement will take hold is something that
most can't even start to figure out.
But, when we look to our everyday lives and the purchase we and
our friends make, trends are easier to see.
Where it Can Hurt You
Easily, the biggest pitfall of investing in your favorite
companies though, is getting married to them. Brand loyalty runs
deep, but as long as you can recognize that your affinity for
buffalo wings may not be shared by everyone or that even if it is,
the company can mismanage itself into the ground, you will be
okay.
Investing Like a Guy
So, as a cursory look, I took a look at what I'm doing on a day
to day basis and wondered; which of these companies that I
patronize could be viable investments?
While my girlfriend may not like it, I love my Harley Davidson (NYSE: HOG) motorcycle. They
have arguably the most loyal customer base in the world, but they
can be polarizing even amongst the riding community. As an
investment goes, I like the idea of having this stock but I'll hold
off for now. Estimates are inconsistent, valuations are expensive
and they have a highly discretionary product.
But some things I do like could be great additions to a
portfolio and would be easy for me to root for.
Feeding Frenzy
Who doesn't like donuts? Krispy Kreme (NYSE: KKD) has
been an investor's dream lately. Shares are currently a Zacks #1
Rank (Strong Buy) thanks to sharply rising estimates.
Full-year estimates are averaging $0.31 this year, which is more than 150% the year
prior. Next year analysts are looking for $0.40, another 32 percentage points of growth.
While the P/E of 32 times looks high, factor in the long-term
growth rate and you get a PEG of just 0.6, which is a great
value.
And, the growth is easy to see. Yes, the nation getting more
health conscious, but the company is expected to ramp up its
beverage offerings, a high-margin product. For a comparison,
competitor Dunkin Donuts gets about half its revenue from coffee.
Even if KKD doesn't get its coffee sales that high, beverages
should still give their bottom line a huge boost.
I alluded to my affinity for wings earlier and right now
Buffalo Wild Wings (Nasdaq: BWLD) is a Zacks #2 Rank (Buy).
It doesn't look as enticing at KKD, but definitely worth looking
into with growth rates of 20% or better for the next 2 years. And
estimates are still inching higher.
Burn Off the Calories
In order to eat all that junk food, a guy's gotta work some of
the extra calories off. Whatever method you choose, running,
basketball or other sports you are going to need some gear. Foot
Locker (NYSE: FL) analysts are expecting the athletic retailer
to grow 40% this year and another 13% next year. The P/E is near 14
times, so you won't need to break the bank for the stock.
Heading Outdoors
I'm heading to Wisconsin to do
some fishing over the 4th of July weekend and while there is some
overlap with FL, Dick's Sporting Goods (NYSE: DKS) also
offers fishing, camping and other products for outdoor
recession.
Shares are a Zacks #3 Rank (Hold) right now, but estimates are
still moving up. Expected growth rates for the next 2 years are in
the upper teens and the stock trades with a PEG ratio of 1.2
times.
But That's Just Me
These stocks make sense to me, but we all lead different lives.
So, take a look at what you do. Where you spend your money. And
follow your greenbacks to potentially profitable additions to your
portfolio. Just don't go falling in love with them until you dig
into the financials.
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