It’s Valentine’s Day, and love is in the air. I joined CNBC’s Pauline Chiou to chat about stocks to commemorate the occasion.
I’ll start with LVMH Moët Hennessy Louis Vuitton (LVMUY), the world’s largest fashion powerhouse… and also happens to be the maker of fine champagne. So if anything gets Valentine’s Day off to a proper start, it would be a nice bottle of Dom Perignon and a designer purse for that special lady in a guy’s life. On a more serious note, European stocks have mostly traded sideways for years, and LVMH is no exception. This stock is a play on a bounce in the euro, on European stocks in general and on an recovery in China, the world’s largest luxury consumer. This stock is not exactly cheap, trading at about 23 times earnings, but this is also a stock that has traditionally traded at a premium. You’re also getting a healthy 2% dividend while waiting for the recovery to happen.
Next up is L Brands (LB). So, you’ve had a romantic Valentine’s Day evening of wining and dining. What could be better than sexy lingerie to keep the night interesting? This brings us to L Brands, the parent company of Victoria’s Secret. Along with a lot of brick and mortar retailers, L Brands has struggled in recent years as consumers have shifted to cheaper and more convenient internet competition. But Victoria’s Secret is still very much the leader in this space, and the stock today is quite cheap. It trades at 2013 prices and sports a dividend yield over 4%. And unlike a lot of brick-and-mortar retailers, Victoria’s Secret has years of experience in direct-to-consumer catalogue sales. The company’s marketing has gotten somewhat stale, but revenues have grown at a solid clip since the 2008-2009 recession. At current prices, you’re getting paid handsomely to wait for a marketing reboot.
And finally, we get to Pfizer (PFE). You have champagne… you have lingerie… I suppose it’s only appropriate that Viagra comes next. All joking aside, Viagra’s maker, big pharma giant Pfizer, is interesting. The stock has traded sideways for the past three years due to stagnating revenue growth and, like all big pharma companies, faces political pressure to lower drug prices. But given that the stock trades for just 11 times forward earnings and yields 4%, a lot of bad news is already priced in.
Disclosures: As of this writing, I had no position in any stock mentioned in this article.
Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the Sizemore Insights blog. To read more of his work, CLICK HERE NOW.
Disclaimers: If I mention a stock favorably, you should assume that I have a position in it, both personally and in client accounts. This does not, however, automatically mean that you should own it. I am expressing my opinions in this newsletter, not offering individualized financial advice or soliciting you to buy securities. See full disclaimer here.
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