The Redneck Portfolio: Gettin' Drunk and Fixin' StuffPosted by Brianna Panzica - Tuesday, August 7th, 2012
The time for redneck stocks has come...
Motley Fool calls it the “Good Ole' Boy Portfolio.” And it's chock full of companies that make products tailored to the common man, the average American, or, more specifically, the good ole' boys.
If you've ever listened to a country song, you know what I mean. Guns and beer, fishing and hunting, pickups and tractors...the list goes on.
The economy might not be on the best footing, but these products have been doing better than ever. Here are some companies that are riding high because of rednecks.
Beer and Tools
The highlight of any good ole' boy's summer is sitting around with a couple of buddies and cracking open a cold one. Whether it's a Budweiser, Michelob ULTRA, Busch, or Beck's, it all comes down to one company: Anheuser-Busch InBev SA/NV (NYSE: BUD). This company makes over 200 beer brands and has had a great year so far. Sure, its earnings report wasn't exactly as great as analysts may have wanted, but in the past year it's been up 41.62%. With a 52-week high of $84.05, it's not doing too bad at $81.76.
And while spending time out in the sun with a beer to cool down, a good ole' boy might want to fix up the old pickup. Other auto parts suppliers may not be as successful, but AutoZone Inc. (NYSE: AZO) is having a good run. It reported its fiscal third quarter earnings in May, which showed a 9.3% rise in earnings, and it was trading toward the higher end of its 52-week range, hovering around $367.14 with a high of $399.10. In July, Moody's raised its outlook on the company from stable to positive, reporting that it's the strongest in the sector.
Hunting and Fishing
Any average good ole' boy has spent time hunting, whether it's for a taxidermied head on the wall or some venison for dinner. And it looks like that's picking up more. Gun companies like Sturm, Ruger & Co. Inc. (NYSE: RGR) have had some nice success lately. With a 52-week high of $58.42, Rugers is currently trading around $44.31. But it's up 77% over the 52 weeks, and the company beat $0.82 expectations with $0.91.
Smith & Wesson Holding Corporation (NASDAQ: SWHC) is also in a pretty good place, trading at $9.61 near its high of $10.25. The company has $53.38 million in cash and had a sales increase of 28% reported in June.
And of course, nothing goes better with hunting than some fishing. What better way to spend a nice day than down by the river reeling in a catch? Plenty of good ole' boys certainly think this way, since sporting goods store Cabela's Inc. (NYSE: CAB) has been doing well. It was right below its 52-week high of $47.28 today at $47.24. And in those 52 weeks the company has seen a jump of 86.93%.
Fast Cars and Pickup Trucks
Fast cars are an American past time. NASCAR's Speedway Motorsports Inc. (NYSE: TRK) is showing that nothing's changed, and the good ole' boys still love seeing those cars speed around the track. The company has a 52-week high of $19.22 and was trading around $15.73 today. In the past year, revenue has increased $27 million despite a slump in attendance, and the extra races added by the company helped it to have a profitable second quarter.
And good ole' boys may love watching those sleek cars fly by, but they choose to drive pickup trucks instead. No one has dominated the pickup market like Ford Motor Co. (NYSE: F). It's F-series pickup truck is a popular model, and though sales were down in July, the company hasn't failed to sell the F-series, which has reported a year of sales increases. It's trading at $9.13, closer to the 52-week low than the high of $13.05.
Tractors and Trailers
When it comes time to plow the fields or just ride the tractor, John Deere is a favorite of many good ole' boys. And Deere & Company (NYSE: DE) is a favorite for investors too. At $78.50, it isn't all that far from the 52-week high of $89.70. Back in May, when the company announced its earnings, it showed a 12.9% rise in revenue year-over-year and raised its forecast for the year to $3.35 billion. It's set to release third quarter earnings on August 15.
And of course, what would a good ole' boy be without his RV? Thor Industries Inc. (NYSE: THO), a major recreational vehicle company, is trading at $30.95, close to its 52-week high of $34.70. It sells brands like Airstream, Dutchmen, and CrossRoads. The company had a dividend increase of 100% over the last three years, and its sales for the fiscal year, which ended July 31, were up 12% from a year ago to $3.08 billion.
So maybe today's the day for industries fueled by the small town folk and good ole' boys. It's about the working man and his recreational activities, not the rich man and his bank account.
Take a look at some of the companies important to the good ole' boys of America and build your redneck portfolio.
The Good Ole' Boy Portfolio
By AnnaLisa Kraft - August 5, 2012 |
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.
The Charlie Daniels Band song, “What This World Needs Is A Few More Rednecks”, is a starting point for what is shaping up to be a pretty darn good year for good ole’ boy stocks relating to the themes mentioned in the song; guns, pick-up trucks, Nascar and other country music themes: hunting, fishing and beer. The ‘1 percenters’ may not understand that hard workers like to play hard too. And they’re willing to spend those sweat of the brow dollars on some very discretionary items. Remember, you one percenters, as the song warns, “…there’s a whole lot more of us common-folks ... Than there ever will be of you.”
“Tryin’ To Take My Guns Away”
As the good ole boy says in the song a lot of them believe the government is going to take their away their guns which led to such demand that Sturm, Ruger & Co. Inc (NYSE: RGR) stopped taking new orders between March and May of this year. The publicly traded gun stocks have been on a tear. Ruger’s up 77% over 52 weeks and much more than that since President Obama took office. Even the tragic Aurora, Colorado shootings only drove up demand more . Ruger has pulled back some from its 52 week high of $58.42 but the company has no debt, a trailing P/E of 19.84 and quarterly revenue growth of 48.90%. It also offers a 2.70% yield. It reported after the bell on August 1 but shares plunged over 10% the next day despite handily beating the whisper number of $0.82 and coming up with $0.91 cents due to new products. The dividend will also be increased. Ruger is buying back stock and recently bought a minority stake in Kodabow, a crossbow manufacturer, in my opinion a canny move into a new space. Note that after beating by two cents last quarter the stock sold off 37% in 30 days.
The other gun company doing well is competitor Smith & Wesson Holding Corporation. It has been trading near its 52 week high of $10.25 making an enormous run from its 52 week low of $2.25. The company reported in late June and investors sure as shootin’ liked that report featuring a 28% rise in sales, the sale of the company’s perimeter security solutions unit and anecdotal accounts that more women are becoming customers. Smith & Wesson has a 40.89 P/E and a 135% backlog, but has cash of $53.38 million and debt of $53.28 million. It has a 57.60% institutional hold, 3.38% owned by insiders and a 10.60% hare of the float short.
Speculation or yield on these two, it’s your choice but more than likely both may run more into the election as gun control political discourse has been strikingly muted despite recent events.
Huntin’ And Fishin’
If you don’t want to take on any political risk from gun control issues there’s still Cabela’s Inc. (NYSE: CAB), the sporting goods retailer specializing in hunting and fishing. It has been hitting 52 weeks highs lately and the 37 stores in the US and Canada are actually tourist destinations. Every time I drive past the Cabela’s back to college for my kid, the parking lot is full with RV’s, motorhomes and cars at all hours that it’s open. Cabela’s is opening two more stores, one in Saginaw, Michigan and in Anchorage, Alaska having just opened another 3 locations. Cabela’s reported a strong Q2 on July 26 spurring a 14.5% share price surge on big volume for an overall rise of 86.93% in the stock price over 52 weeks. The P/E is 19.82 but the company has debt of almost half its cash. Over a third of the stock is held by insiders with institutions holding 64.70% and 7.10% held short.
“Yes, I Drive A Pickup Truck”
The good ole’ boys say it in the song and the companies’ trucks they buy are GM’s and Fords. Ford Motor Co (NYSE: F) is probably the bigger beneficiary as its F-series trucks have been the best selling automotive line in the US for 30 years. While both GM and Ford reported that July sales were down possibly due to the Japanese automakers finally coming back to near full production and also same old same old European troubles, but it should be noted the F-series trucks have now posted a year straight of monthly sales gains, especially the F-150 Eco Boost model. Ford now has a yield of 2.20%. Ford is trading at the lower end of its 52-week range as is GM and of the Good Ole Boy portfoiio these would be the worst performers due to their European exposure, downturn in fleet sales and the ramp up in Japanese automakers’ production.
General Motors Company reported August 2 and actually beat estimates because Europe was not as bad as expected although Q2 profits were down 41%. Analysts also expect a downturn in truck sales as consumers wait until a major model change for 2013. Like Apple customers wait for the iPhone 5, truck buyers like to wait for the first year of a model change and hold off buying the current model.
Beer And Nascar
The beer good ole’ boys drink is made by Anheuser-Busch InBev SA/NV (NYSE: BUD). Close to its 52 week high of $81.69, Bud offers 200 brands of beer and was founded in 1366 and headquarted in Belgium but good ole boys don’t care about that. You might care that the stock is up 41.62% over a year, that the quarterly earnings growth is 75.10% year over year and the yield is 1.60%. As this one has commodity costs related to grain it is good to know the company will raise prices in the fall and consumers will likely still lap it up. Bud just reported July 31 and disappointed somewhat citing costs with launching new US beers and transport charges but Motley Fool contributor Ryan Guenette believes it has the best growth of all the brewers. The company has a P/E of 19.69 but that growth and worldwide brand recognition is something the other brewers envy.
“And I’m a diehard NASCAR fan” so the song goes and Speedway Motorsports Inc. (NYSE: TRK) stock is the best play. It has a 3.70% yield. Despite a reported downturn in Nascar event attendance the stock has still risen from $11.37 to $19.22. It reported on August 1 and revenue is up at $181 million, an increase of $27 million from the prior year. The motorsports entertainment company owns eight tracks and credited extra races held during the quarter for the improvement in revenue. The company reaffirmed guidance as well albeit claiming a challenging macroeconomic environment for its fans overall.
“A Little More Respect for..The Workin’ Man”
That’s what the hedge funds and one percenters are beginning to believe the workin’ man’s purchasing power deserves and accordingly are ponying up for their portfolios. So whither the good ole’ boy trade? Guns will probably continue to be a hot sector and beer is certainly hot (but in a good way.) Cabela’s seems like a strong hold for the long term while the motor related stocks are at their lows. Nascar may be struggling but Speedway’s stock doesn’t seem to reflect it. If you believe like the song says, “ there’s a whole lot more of us common-folks” and that construction and manufacturing in the US is slowly turning around then taking a shot at the good ole’ boy portfolio for the long term could make you some beer money.
Americans Buy Guns in Record Numbers for Christmas
Posted by Mike Tirone - Friday, January 6th, 2012
'Tis the season to be jolly.'
Well according to the FBI, this Christmas season provided a lot of jolliness to gun enthusiasts.
Over 1.5 million background checks on customers were requested by gun dealers to the National Instant Criminal Background Check System in December. What's even crazier with these numbers is how much these gun purchasers are procrastinators. Nearly 500,000 of those requests were just within six days of Christmas.
It was the highest number ever in a single month, eclipsing the previous record set in November. So it looks like it is safe (or unsafe) to say that 2011 was a year for the guns.
On December 23 along there were 102,222 background checks, making it the second busiest single day for buying guns in U.S. history.
Let's not forget that these are JUST background checks, meaning that at the very minimum, one gun was sold for each check, while that does not figure into individual customers bringing home more than one firearm.
Many believe that due to the halted economy, people are preparing for crime waves to sweep the nation, therefore guns are being purchased rampantly. This summer before the Occupy Wall Street protests, Wealth Wire reported the highest selling items on Amazon.com were crowd control and protest-ready weapons such as batons and baseball bats.
Other theories as to why buyers are cleaning the shelves of gun stores is because they believe tighter firearms laws will be introduced in the near future. So to make sure they are prepared for the projected law changes, people are buying in hoards.
On a different level, some just attribute the high gun sales in some creative marketing. There has been reports of certain gun clubs offering pictures with Santa, a very interesting yet effective technique.
According to The National Rifle Association, people are mostly concerned with self defense police officer numbers are continuing to fall.
NRA spokesperson says, “I think there's an increased realization that when something bad occurs it's going to be between them and the criminal.”
From The Telegraph,
But anti-gun campaigners said those who already owned weapons were simply hoarding more of them due to "fear-mongering" by the NRA.
A spokeswoman for the Brady Campaign to Prevent Gun Violence said: "The research we've seen indicates fewer and fewer people are owning more and more guns."
In states like Arizona, home to the tragic killing of six and near-fatal shooting of congresswoman Gabrielle Giffords, citizens are calling for tighter gun control, but according to one local gun dealer, sales couldn't be better. Legendary Guns in Phoenix had 25% higher sales on Christmas and the owner describes ammunition sales as “brisk”.
“A lot of people are concerned about pending gun legislation and the sense about the current administration. People think future availability will be limited and there's a feeling of 'get it while you can.'”
The Top 10 Stolen Cars
Posted by Brianna Panzica - Monday, July 23rd, 2012
Car thefts have fallen as auto manufacturers up the security built into cars.
Of course, plenty of people still have their cars stolen or broken into every year. In 2010, the National Highway Traffic Safety Administration reported an average of 1.17 thefts for every 1,000 cars produced.
Some of this might be personal carelessness. Windows accidentally left down, easily accessible keys, or enticing items like power cords left in view, indicating the likely presence of more expensive gadgets, can all draw a car thief in.
But sometimes it's something even more simple—the make of the car. These cars were listed as the top 10 stolen models by Bankrate.com.
1) Dodge Charger
In 2010, 532 Dodge Chargers were reported as stolen. This Chrysler vehicle was the most stolen car of the year in terms of the theft rate of 6.0433 per 1,000 vehicles produced.
2) Pontiac G6
GM's Pontiac G6 was the second most stolen car of the year. Though the number of thefts was significantly lower, at 111 in 2010, the rate was 4.3383 per 1,000 vehicles.
3) Chevrolet Impala
This GM vehicle came in third despite having the highest number of thefts in 2010. Though 579 were stolen, that came out to only 3.85 per 1,000.
4) Chrysler 300
This vehicle had a theft rate of 3.5399 per 1,000 cars, with 185 thefts in 2010.
5) Infiniti FX35
This is the first foreign car to fall into the mix. The Nissan Inifiti FX35 maintained a similar per-1,000 theft rate at 3.1966, but the number of thefts, 30, was much lower.
6) Mitsubishi Galant
This Mitsubishi vehicle had a theft rate of 3.1527, also similar to the Infiniti and Chrysler vehicles, with 38 thefts in 2010.
7) Chrysler Sebring
Thefts for this car were much higher than both the Mitsubishi and the Nissan. The Chrysler Sebring had 130 thefts in 2010 but a lower theft rate at 3.0217.
8) Lexus SC
Toyota's Lexus SC is an interesting case. While only one of these cars was stolen in 2010, that amounted to a rate of 2.9851 per 1,000 produced, as only 335 were produced that year. That doesn't seem to be hard evidence that this car is highly stolen, but the rate of theft versus production puts it higher up on the list.
9) Dodge Avenger
Thefts for Chrysler's Dodge Avenger jump in comparison to the Lexus SC. In 2010, 197 of these cars were stolen, a rate of 2.914.
10) Kia Rio
The Kia Rio was the tenth-most stolen car in 2010 in relation to the number manufactured. The 55 thefts that year gave it a theft rate of 2.8986.
This list contradicts sheer numbers of cars stolen. If we were to look at the highest number of car thefts, Toyota's Camry would come out on top with 691 thefts in 2010.
Also ranking high would be the Toyota Corolla, with 615 thefts, and then of course the Chevrolet Impala and the Dodge Charger, both of which made this list.
The best thing you can do, no matter what kind of car you own, is to take basic security precautions to avoid theft. Lock your car, roll up the windows, and hide any valuables or things indicating you might have valuables (like that tell-tale iPod cord).
If your car does not already have a security system, or to beef up your car's existing system, you could have LoJack installed, which will track a stolen car, or another car security system.
And be smart. You can't always control where you park your car, but parking garages and certain neighborhoods often draw in more theft. Vigilance is key.
Is Beer a Reflection of the World Economy?
Posted by Wealth Wire - Tuesday, July 31st, 2012
Good news first. Despite the financial crisis, the Eurozone debt crisis, the housing collapse, the endless series of taxpayer-funded or central-bank-engineered bailouts, and despite various bubbles inflating or blowing up, worldwide beer production has increased year after year. In 2011, it rose by another 60 million hectoliters to 1.9 billion hectoliters (1 hectoliter = 26.418 US gallons), and was a very respectable 38.3% higher than in 2000, according to the annual beer and hops report by Barth-Haas Group.
The bad news was regional. In most developed countries, production dropped. In the US, it edged down 1.6% last year and 5.7% since 1990—despite a significant increase in the population. In Germany, it stabilized recently, but had plunged 20.5% since 1990. Production in the UK had skidded 27.5% during that time, though it ticked up last year. No glimmer of hope for Japan: production is down 14.7% since 1990, and down 3.6% from 2010, the seventh straight year of declines. Only 442.39 million cases were shipped, the lowest ever in recorded Japanese beer history.
But Asia was on a tear. Well, except Japan. And India, the only major country that hasn’t yet discovered a taste for beer. The driver in worldwide beer production growth was China, up 9.3% in 2011, and up an astonishing 600% since 1990. Of the 60 million hectoliters in growth worldwide last year, 42 million where brewed in China. Vietnam made huge strides; in percentage terms a 2,680% melt-up since 1990. Beer production also grew in Africa and Latin America.
Russia is a special case: in the Soviet Union in 1990, beer production was zero (the chart below shows the percentage increase since 2000). By the time I went to Russia in 1996, Russian beers and Heineken were available, but hard to find in smaller towns or on trains, though vodka (served in water glasses or by the bottle) was everywhere. Since then, Russia has shot up to third place in beer production, knocking off Germany and a slew of other countries, only to get itself knocked off by Brazil last year. Production tapered off, not because of a decline in per-capita consumption—it’s still increasing despite a government crackdown on alcohol consumption—but because imports are making some headway.
When I was a kid in Germany, I engaged in what in the US would be considered underage drinking. I was too young to drive, and so it didn’t bother anyone, except me the next day. It was the time when German beer consumption peaked at 151 liters per capita, the highest in the world. But then I went to America ... and German beer consumption began a multi-decade decline that may finally be leveling off at 107 liters per capita. Enough for a second place in 2010, but not in 2011, when Austria knocked Germany down to third place.
Within any country, there are regional differences. But they’re particularly strong in Germany. Bavarians are still swilling it at a rate of 155 liters per capita, whereas Germany’s wine regions are down to 69 liters, an outright scandal. My grandfather, who was born and raised in the Kingdom of Bohemia, which was part of the Austrian Empire at the time, and is now part of the Czech Republic, would turn over in his grave.
Today, the Czech Republic and Austria are the top two beer-drinking nations in the world with 143 and 108 liters per capita respectively. By comparison, in the US, we drink 75 liters per capita, on par with Russia.
Note the last country on the list: India. 2 liters per capita! Just imagine Asian beer production if India’s 1.2 billion people discover—unlikely as this may seem—just how good a cold one can be after a hard day at work, or with their favorite meals!
It’s getting worse: in June, ABInBev announced that it would acquire 7th ranked Grupo Modelo, giving the company a 21.5% share of the worldwide market. Without further acquisitions, the top six will brew 54.7% of all beer in 2012. But the more these mega-groups acquire each other, and the more they produce the same stuff, the easier it is for scrappy outfits with extraordinary beers to elbow their way into the market.
Germany still has about 1,250 breweries, a far cry from the many thousands it used to have—but almost four times as many as in the rest of the EU combined. They range from brewpubs to mega breweries. About half of them are in Bavaria. And they sport about 5,000 brands, some of which are truly awesome, and they're doing well.
In the US, the industry has been more than morose, with mega-brewers battling each other tooth and nail over declining sales. And yet there are astonishing winners. Read.... The Beer War on American Soil.
*Post courtesy of Testosterone Pit.