Stocks with a heart


We had Valentine’s Day this week, and love is in the air. Here are three stock picks to commemorate the occasion.

I’ll start with LVMH Moët Hennessy Louis Vuitton (LVMUY), the world’s largest fashion powerhouse… and also happens to be the maker of fine champagne.

So if anything gets Valentine’s Day off to a proper start, it would be a nice bottle of Dom Perignon and a designer purse for that special lady in a guy’s life.

On a more serious note, European stocks have mostly traded sideways for years, and LVMH is no exception.

 

Stocks

 

Euro Play

This stock is a play on a bounce in the euro, on European stocks in general and on a recovery in China, the world’s largest luxury consumer.

This stock is not exactly cheap, trading at about 23 times earnings, but this is also a stock that has traditionally traded at a premium.

You’re also getting a healthy 2% dividend while waiting for the recovery to happen.

 

L Brands

Next up is L Brands (LB). So, you’ve had a romantic Valentine’s Day evening of wining and dining. What could be better than sexy lingerie to keep the night interesting?

This brings us to L Brands, the parent company of Victoria’s Secret.

Along with a lot of brick and mortar retailers, L Brands has struggled in recent years as consumers have shifted to cheaper and more convenient internet competition.

 

Catalogue Powerhouse

But Victoria’s Secret is still very much the leader in this space, and, in my opinion,the stock today is quite cheap. It trades at 2013 prices and sports a dividend yield over 4%.

And, unlike a lot of brick-and-mortar retailers, Victoria’s Secret has years of experience in direct-to-consumer catalogue sales.

 

Perky Sales

The company’s marketing has gotten somewhat stale, but revenues have grown at a solid clip since the 2008-2009 recession.

In my opinion, at current prices, you’re getting paid handsomely to wait for a marketing reboot.

And finally, we get to Pfizer (PFE). You have champagne… you have lingerie… I suppose it’s only appropriate that Viagra comes next.

All joking aside, Viagra’s maker, big pharma giant Pfizer, is interesting. The stock has traded sideways for the past three years due to stagnating revenue growth and, like all big pharma companies, faces political pressure to lower drug prices.

But given that the stock trades for just 11 times forward earnings and yields 4%, in my opinion, a lot of bad news is already priced in.

Photo Credit: Stuart Richards via Flickr Creative Commons

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Charles Sizemore
Charles Sizemore
Sizemore Capital Management LLC is a registered investment advisory firm located in Dallas, Texas. Charles Lewis Sizemore, CFA is the founder and Chief Investment Officer of the firm.