Dow Jones 10,012, (down),(DJI day low Friday 9,835), week ending 02-05-2010
My daughter Molly told me last week that she feels good on the days that she shops at these two stores, Whole Foods Market Inc. (Symbol WFMI) and Urban Outfitters Inc, (symbol URBN). So I thought that I should check out these businesses to see if they were good investments. I thought that if people have an emotional bond or response with a shopping experience that they certainly would visit that store again. She is in the 25-30 female demographic and I would think that they are vibrant shoppers.
Urban Outfitters offers lifestyle merchandise through four brands: Urban Outfitters, Anthropologie, Free People, and Terrain. While the majority of sales come from the retail segment, which includes over 300 stores, catalogs, and the Internet, a portion comes from the wholesale division. Urban Outfitters targets young adults aged 18 to 30 through its unique merchandise mix and compelling store environment. So are they a good investment? Well the 12 month total return was 85.3%. 5 year projected earnings growth of 22.2% and 5 year projected sales growth of 18%. Those numbers work for me. It has corrected a little bit here so jump in at will.
The Whole Foods Market Inc. story, "Back in 1980, we started out with one small store in Austin, Texas. Today, we’re the world’s leader in natural and organic foods, with more than 270 stores in North America and the United Kingdom". Their mission: "Whole Foods — We search for the highest quality, least processed, most flavorful and natural foods possible because we believe that food in its purest state — unadulterated by artificial additives, sweeteners, colorings and preservatives — is the best tasting and most nutritious food there is". Invest now? Whole Foods has a 12 month return of 125%. They are a supermarket though, and their paltry 1.80% net profit is considered high in the supermarket industry. So for this Green++ rated company, that says it will have 16-17% growth in sales and earnings, I would say to look for a lower price entry point to buy in.
So what are us older age 55-65 Boomer demographic buying? Izod shirts, which are owned by Phillips-Van Heusen (Symbol PVH) and the new Chocolate Cheerios from the General Mills Company, (Symbol GIS). I would rate PVH a strong buy and GIS a moderate buy here.
If you're bored with all this shopping talk and just want to stay home, you can pick up a deal on Xilinx,(Symbol XLNX), here, which designs, develops and markets complete programmable logic solutions. The stock is selling for $23.17 and is projected to earn $1.75 a share next year, not bad numbers. Strong buy.
So check out the store or product you love, and see if their numbers make sense!