Blog

Valentine's Day Stocks - Ups & Downs With Love

We picked our first Valentine’s Day investments for the Hilton Head Monthly in 2006, more than ten years ago, as a tongue-in-cheek suggestion for those who would prefer to give or receive stocks, rather than the traditional Valentine’s day selections.   Let’s see how our gifts ideas made out, and whether the investments have lasted longer than the candy and flowers.

Tiffany’s seemed like a natural choice in 2006; after all, almost every desirable Valentine’s Day present save candy can be found at this high-end Manhattan jewelry retailer.   Established in 1837, TIF has grown from its landmark 5th Avenue store to a global jewelry conglomerate, with over 300 boutiques throughout the United States and abroad, and a strong mail order and internet business.  While our stock certificate didn’t arrive in a signature white-ribboned blue box, its value has grown more than anything that did.  Now selling at approximately $78 per share, $38 above its $39.57 (adjusted for dividends) price ten years ago, Tiffany’s shares have enjoyed an annualized gain of roughly 7%. The stock pays a $1.80 dividend, giving a yield of just over 2.2%, and has a history of generous dividend increases.

Hershey (HSY), the Pennsylvania chocolate company, was our sweet alternative to candy; with 43% share of the domestic chocolate market, and more than 80 brands sold in 70 countries. Hershey’s chocolate stayed fresh over the last decade; it was selling at $55/share in February 2006 ($51.53 adjusted for dividends); today it’s priced at $105.45, for a total return of 7.4% per year over the ten years, a tasty bon-bon.  The dividend, averaging between 2-3 percent, was an additional sweetener.

” `…for this was St. Valentine’s Day, when every fowl cometh to choose his mate`.”     Chaucer

We’re going to stick with these two companies; they have both delivered good returns over a decade that included a global recession, and their dividends make them a gift that keeps on giving.

Gold never lost its glitter, although we were somewhat cautious when we first wrote about it in 2006. Gold had just reached a twenty-five-year high of $541 an ounce, and many pundits were predicting a sharp decline. Then, in 2011 safety conscious investors, concerned about a collapsing global economy, drove the price sky high, reaching a stratospheric $1,801 an ounce. Since then the price has settled down to around $1,210 an ounce, still giving the recipient an annualized gain of 8.38%.

Valentine’s Day 2013 we added LVMH Moet Hennessey Louis Vuitton (LVMUY) to our gift list. LVMH is a global retailer and manufacturer of luxury goods, wine, and spirits, sold at over 3,000 stores worldwide. The company is headquartered in Paris, where they apparently believe in adding as many of their brands as possible into their company name. Fortunately, they didn’t include them all; they also own Dom Perignon, Veuve Clicquot, and Glenmorangie single malt scotch, as well as offering fashion goods under the Fendi, Donna Karan, Marc Jacobs, Givenchy, and Tag Heuer brands.  The stock has returned 6.46% per year to shareholders over the last three years; revenues have grown by nearly 8 % per year. LVMUY shares are currently priced at $40.32; they pay a 2% dividend yield, and remain well positioned to profit from increasing wealth in the developing world. 

1800-Flowers.com (FLWS) was one of the first companies to harness the power of the internet to retail, in this case floral sales. Founded in 1976, they have 9 company owned and 175 franchised stores throughout the US. Their delivery services have expanded from just flowers to include specialty foods, fruit, merchandise, gift baskets…even steaks and chops! FLWS is currently selling for $9.75/share and has given investors a 77% return over the last 3 years. The company just reported quarterly earnings of .93 per share, missing analysts estimates by a fraction. Investors were disappointed, and the stock has pulled back by about 10% since the beginning of 2017, although it had gained 50% over the last 12 months. It may be a buying opportunity; the company has given earnings guidance for the full year 2017 reflecting per-share growth of 5-10%.

From all of us at The Bedminster Group, Happy Valentine’s Day!

Steven Weber, Gigi Maxfield & Frank Weber

TAGGED: Investments
No Comments