Dow Jones 10,193 (Strong down) Week ending 05-21-2010
Ah yes, the Baby Boomers, born generally 1943 to 1960, getting older in body but still strong in spirit. They control 67% of the countries wealth some 28 trillion dollars and everyone is trying to get at it, including Uncle Sam who is now named Uncle Barack or Barry to his friends. Boomers have about three trillion in disposable income. Most Boomers plan to buy a new home when going into retirement. So what are they planning to spend their money on?
Boomers are usually hard working and tired by the end of the day and want to get a good night sleep so their back doesn't hurt. So the first thing is a Tempur Pedic International Inc. (Symbol TPX, $31.37) mattress. This stock has a 12 month total return of 185.3%. It has an earnings growth rate just shy of 14%. Operating income has been increasing the last 5 Quarters.
When they are not sleeping, Boomers are off to the islands taking those Carribean cruises and shopping duty free. CARNIVAL Corp. (symbol CCL, $35.61) is the most profitable in this space. Carnival is projecting $2.74 earning per share for 2011. Royal Caribbean Cruises Ltd (Symbol RCL, $28.34) is also very well positioned in this space. 2011 earnings projected at $2.62 per share. And what are the boomers buying at these duty free shops?
Polo Ralph Lauren Corp. (Symbol RL, $84.27) has projected 2011 earnings of $5.55 per share. Williams-Sonoma, Inc. (Symbol WSM, $28.84) WSM has a 12 month total return of 126.7%. Also some of those 50 and 60 year olds with their new diets are squeezing into those Guess? Inc.(symbol GES, $36.79) Guess by Marciano jeans. Whoa! Guess 2011 earnings projected at $3.47 per share. Now that is sheik. All good names for your portfolio.
Last but not least, the Boomers will be buying that new home. If they are going to Florida it will probably be purchased from Lennar Corp. Cl A (Symbol LEN, $17.47) which has big real estate holdings in that state. I own this one because I found it to have the best 2011 earnings projection of .86 cents per share for the homebuilders stocks. It already has had a 12 month return of 85.4%.
Boomers also love food and gardening and Scripps Networks Interactive Inc. Cl A (symbol SNI, $43.52) rules the roost in this area of TV with Food Network, Home and Garden TV, (which also does real estate), and other similar channels. Network stars like Bobby Flay and Giada Delaurentis keep ad revenues jumping at this network. SNI operates at 24.20% net profit margins.
So put your old Woodstock tie-dyed T-Shirt on and put some of these stocks in your retirement portfolio.
Good Eats and Bon Appetit,