From the Expert: Investing - Valentine’s Stock Picking
You’ve eaten all the chocolate, who is benefiting from it?
The average Brit spends just over £50 on Valentine’s Day; a figure that pales in comparison to what the Italians spend and is not even half of what the Americans splurge. That said, the power of numbers means that all of our £50s added together will amount to over £1 billion, so it’s definitely worth looking at where all that money is going!
Gift-wise, chocolate is right up there, and a decent chunk of our collective £1bn will be heading into the pockets of leading confectionery companies. Relative newcomer Hotel Chocolat has certainly taken a sizeable piece of the Valentine’s pie. The company only joined the stock exchange in 2016, but since then it has expanded significantly and I must now resist the temptation of the new Victoria station store when I walk past on a daily basis. Cadbury owner Mondelez is another likely Valentine’s beneficiary, as is Lindt… although a single share in Lindt will set you back over £50,000!
Valentine’s Day is supposedly one of the most popular days of the year for proposals, and online ring searches tend to spike in early February. No doubt this is a good time for Tiffany, the renowned jeweller that makes about one third of its revenue from engagement jewellery. Non-engagement jewellery (I may have made up that term – I doubt ‘non-engagement jewellery’ is an official category!) is pretty high on the online search list too, and in the real world I expect the queues that seem to form outside Pandora stores are particularly long in the lead-up to 14th February.
Although Valentine’s Day originally started out as a gift-based day on which couples would exchange cards and confectionary, we’re now seeing a growing preference to spend on experiences rather than physical gifts. Analysis of Valentine’s Day expenditure now shows half going on eating out and weekend breaks. While Nando’s may be the most popular location for a first date in the UK, sadly it’s in private hands so we’ll have to look elsewhere for investable restaurant ideas! An initial search for listed restaurants on my trading system came up with McDonalds and Greggs, so I had to delve a bit deeper in hope of finding something a little more appropriate. Fancy restaurants tend to be privately held, but the big listed pub chains such as Marston’s and Young & Co should have seen healthy Valentine’s trade. If experiences are the order of the day the big hotel chains such as InterContinental Hotels and Marriott will likely see a spike in bookings revenue, but they must surely still be adjusting to life in the presence of privately-held Airbnb.
Whether you were treated to the wares of any of these companies or not, I hope you all had a wonderful Valentine’s Day!
Oh and don't forget: This article is meant to be commentary only. It’s not intended to be taken as investment advice, so please don’t assume I’m telling you that investing in one of these companies would be suitable for you. If you are thinking about getting into investing that’s great, but you should always take advice from a professional advisor before deciding.
As with a lot of things in life, investing is not without risks. Investments can go up, but they can also go down, so you might lose some of your money or in the worst case you might not get back any of the money you put in. Just because a company or investment has done well in the past does not mean that it will do well in the future.
Collage from photo by Chris Li on Unsplash.
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Written by Rachel Winter, Senior investment manager at killik & co
I have a degree in Economics and have completed the Chartered Wealth Manager qualification, and now I’m enjoying applying the theory to everyday life. We’re all making decisions every day about what we like or dislike and what to buy or not to buy, and at Killik we look at these trends and try to relate them to companies on the stock market. For example, when we picked up on a noticeable increase in the number of Londoners wearing their trainers to work we started looking at shares in the big sportswear brands. We have also looked at shares in cosmetics companies because of the spike in makeup sales that has taken place since people started taking more selfies.
I’m really keen to make investment more engaging, and I try to get to know my clients and speak to them about companies they will find interesting. I also act as a spokesperson for Killik & Co and write regularly for financial publications such as the Investors Chronicle and MoneyWeek, as well as presenting a weekly YouTube video which aims to explain what is happening with the stock market.