An Investor’s Take on 10 Super Bowl Ads

If you caught the big game this past Sunday, you probably spent a significant chunk of time watching Super Bowl commercials, which are known for their huge budgets, celebrity cameos and screwball humor. Whether or not you were a fan of this year’s commercials, if they worked as planned, the featured brands are now a bit more ingrained in your memory — and in the minds of tens of millions of viewers.

It’s no surprise that many industry leaders were in the lineup. Clearly, these companies had enough money in the bank to shell out the average $3.5 million price tag for 30 seconds of air time. But does this make them a good investment? I must admit I’m curious about some of these big players, so today I’m going to take a few minutes to evaluate some of the biggest companies that showcased their brands at the 2012 Super Bowl.

General Motors and Toyota

Automakers overwhelmed the commercial lineup this year. That’s understandable since U.S. auto sales are on the rise again, and automakers are eager to capitalize on increased demand.

First up, General Motors’ (NYSE:GM) Chevrolet had a number of creative commercials, each demonstrating a Chevy’s ability to perform in outlandish situations such as skydiving, bungee jumping and even the apocalypse. Watch all three spots here.

But in reviewing GM stock, it’s obvious that the company’s fundamental health doesn’t “run deep.” Of the eight fundamental factors that I look at, General Motors has decent operating-margin growth, cash flow and return on equity. On the other hand, the company needs to improve both its sales growth and earnings growth, so overall, this is a financially mediocre company.

The real impetus for me is that buying pressure for GM is at rock-bottom. This stock has made some gains in the past quarter, but I’m not convinced that its financial troubles are over yet. In the past three months, analysts have more than halved their earnings estimates for the fourth quarter. So I consider this stock a “sell” — keep this one on the sidelines for now. Click here to view my stock analysis for GM.

Toyota (NYSE:TM) had an ad that grabbed viewers’ attention — I especially liked the prospect of a new and improved Department of Motor Vehicles.

However, while Toyota can claim they have a reinvented Camry, the company should spend some time working on its financials.Toyota earns D- and F- ratings for every single one of the fundamental variables I look at. And investors have caught on to its fundamental weakness — buying pressure for this stock remains quite low. Last summer, I rated the stock a “hold,” but the fall and winter has knocked the wind out of Toyota’s sales. So I also consider TM a “sell” — do not get behind the wheel of this stock.