Great Brands and Great Stocks by Newport International Group Stocks Warning
by Sylvestre Yount IT StaffGreat
Brands and Great Stocks: Part 1
Interbrand this week released its updated 2013 brand
rankings, which saw Apple leap
to the No. 1 spot, followed by other tech players and, of course, Coca-Cola. Having a powerful brand is,
obviously, an invaluable tool -- one that bewitches consumers and investors
alike. And, over time, each of the five top picks have been great long-term
holdings. However, a quick glance at Interbrand's
top picks shows just two that have outperformed the S&P 500 this year.
When it comes to stock picking, the lesser valued brands may have greater
upside potential in the coming years. Here are a few to look at.
The biggest year-over-year riser in Interbrand's ranking,
Apple, has lost one-tenth of its market value this year.
Looking further down the list gives investors a glimpse into
brand names that are growing fast and whose stocks may not be as closely
scrutinized by Wall Street analysts, and potentially offer investors
greater upside potential.
In the first half of this year, net sales grew 7.6%, driven
primarily by the Asia-Pacific region. Though China has slowed down in recent
years, the region continues to offer very attractive growth prospects for all
luxury goods makers. The core Prada brand saw its revenues rise 17.4%. During
the period, the company opened 30 new stores, and it plans to continue its
expansion on a global level.
Prada's stock isn't cheap, but its valuation on a trailing
basis is lower than other high-flying big-name luxury goods makers, such as Michael Kors. Over
the past two years, Prada has gained more than 100% in stock value, surpassing
by a multitude the top five brands on the list.
Another icon, though in a different league, is Nike (NYSE: NKE ) . No. 24 on the list, and growing 13% in brand
points over the prior year, Nike is an absolute powerhouse stock -- gaining
more than 42% this year. The company recently announced its earnings, and there
was nothing but good news. Nike has refocused
on its core brands and is
seeing its Asian market stabilizing, along with solid growth in Eastern Europe.
Nike is an industry leader and an innovator, with no signs of slowing down
anytime soon.
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