Investing In The Kitchen
David Trainer | Jul 14, 2014 10:46AM ET
Investors look for ideas from many different places. Some go to websites like Investing.com while others subscribe to regular newsletters. However, investors can find ideas closer to home. A quick look around the kitchen reveals numerous products made by publicly-traded companies.
Figure 1 compares 10 companies that make common kitchen products on the basis of return on invested capital (ROIC) and price to economic book value (PEBV). ROIC is the best measure of a company’s profitability, while PEBV most accurately captures the growth expectations embedded in a company’s stock price.
Tupperware Brands Corporation (NYSE:TUP) is the most profitable company on the list by far. Very few Consumer Discretionary companies can match its 22% ROIC. However, TUP’s 1.55 PEBV also makes it significantly more expensive than some of the other companies on the list.
Harbinger Group Inc. (NYSE:HRG) is the cheapest kitchen stock with a PEBV of 0.5, but its profitability falls in the bottom half of the group. Down at the bottom, we have companies that have low profits and high valuations. Avoid them.
Sam McBride contributed to this report.
Disclosure: David Trainer and Sam McBride receive no compensation to write about any specific stock, sector, or theme.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.