Go America!
The Fourth of July is a celebration of independence, and investing in the companies and capitalism that made America great is a fine way to celebrate the holiday. It’s also a nice way to remember what products will be in high demand and to invest appropriately as summer activities, cookouts and entertaining head into high gear. Here are some stocks that should see a pop of their own from July 4 sales.
Li & Fung
Li & Fung is a diversified company that manufactures fireworks under the Black Cat brand. It’s also involved in many industries including designer apparel, home decor and furnishings, trading on the Hong Kong stock exchange. “The $30 billion company trades at less than 10 times earnings,” says Robert R. Johnson, president and CEO of the American College of Financial Services.
Kraft Heinz Co. (ticker: KHC)
With barbecues firing up and people headed outdoors over the July 4 weekend, there will be plenty of demand for condiments and food. Kraft Heinz makes ketchup and mustard, Oscar Meyer meats and Ore-Ida French fries, so it hits a few popular products. It also has some savvy investors backing it. “Berkshire Hathaway (BRK.A, BRK.B) and 3G Capital each own about 25 percent of the company. The remaining 50 percent of its outstanding shares are publicly traded. This is a very well-run company with a dividend of about 3 percent,” says David Kass, a professor at University of Maryland’s Robert H. Smith School of Business.
Tyson Foods (TSN)
Nothing says Fourth of July like a hot dog — and Tyson Foods produces the well-known Ball Park Franks brand as well as food under the names Jimmy Dean, Hillshire Farm and Sara Lee. “It is a $23 billion company and is currently trading at 16 times forward earnings,” Johnson says. TSN stock is on a huge run as of late, up more than 24 percent for the year.
PepsiCo (PEP)
Pepsi is a global behemoth food and beverage company with a market capitalization of $147 billion. Best known for its beverage products such as Pepsi, Gatorade and Mountain Dew, it also produces snack foods widely consumed on the Fourth of July, including Lays, Ruffles, Doritos, Tostitos, Santitas and Cheetos. “PepsiCo sells at a forward price-earnings ratio of 20,” Johnson says.
Anheuser Busch (BUD)
Americans drink a lot of beer on July 4. In fact, Americans spent $1.4 billion on beer alone for the holiday in 2014, according to Nielsen. Anheuser Busch is even changing the labeling on its flagship beer cans this summer from “Budweiser” to “America,” Kass says. “Beer will be very popular at July 4 weekend cookouts. This well-managed publicly traded company is planning to merge with SABMiller and has a dividend of 3 percent.”
Craft Brew Alliance (BREW)
Craft brews are particularly popular and one prominent publicly-traded craft brewer is Craft Brew Alliance. “BREW produces beer under the brand names Kona, Widmer Brothers, Redhook, Omission and Square Mile. It is a very small company with a market cap of only $188 million. It is relatively richly valued, selling at 31 times forward earnings,” Johnson says.
Boston Beer Co. (SAM)
The more prominent choice in this space is the maker of Samuel Adams brand beer, Boston Beer Co. “SAM is a much larger company with a market cap of $2 billion. It manufactures Samuel Adams Boston lager and 60 other varieties of beer in addition to Twisted Tea malt beverages and Angry Orchard hard ciders. It sells at 22 times forward earnings,” Johnson says.
Exchange-traded funds
Can’t choose a single stock? No worry, there are several exchange-traded funds that give broad exposure to U.S. stocks. The iShares Core S&P Total U.S. Stock Market fund (ITOT) invests in more than 3,700 companies, with top holdings Apple (AAPL), Microsoft Corp. (MSFT), Exxon Mobil Corp. (XOM), Johnson & Johnson (JNJ) and General Electric Co. (GE). The fund holds more than $4 billion in assets and has a cheap expense ratio of 0.03 percent, or just $3 per $10,000 invested annually. For mid-cap stocks, try the iShares Russell Mid-Cap Growth ETF (IWP).
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8 Ways to Celebrate July 4 With Stocks originally appeared on usnews.com
