When it comes to browsing for investment ideas, I’m going to assume the Bible is hardly on your list of resources. Still, that doesn’t mean there aren’t a few decent concepts hidden in between the verses and inspiration.
OK, maybe “decent” isn’t the right word in this instance.
What I’m really thinking of is the Bible’s categorization of human flaws — namely, the seven deadly sins Solomon warned of in the book of Proverbs: greed, wrath, envy, pride, lust, sloth and gluttony.
You’re likely familiar with them — whether it’s because of the holy book or even the Brad Pitt thriller plotted around them — and we’re all guilty of at least one of them.
Of course, as is the Wall Street way, there has to be a way to capitalize on these sins, right? You bet. Each of these publicly traded companies plays to one of the seven deadly sins:
Greed: Las Vegas Sands
You could save your money and steadily build up a modest sum after a number of years … or you could head to a casino, put it all on black and hope for the best!
Lots of people choose the latter.
While not everyone puts it all on black, you get the point. There’s no denying our desires to get rich quick.
There’s no better place to see that thought put to work than Las Vegas, and maybe no better company to choose than Las Vegas Sands (LVS).
LVS boasts several luxury hotels and casinos, including The Venetian and Palazzo, where you can find poker rooms, slots, table games and sports books. And as with most casinos, LVS is at its best when more people have more money in their pockets. (At least when they enter the casino.)
That’s at least part of the reason Las Vegas Sands has been climbing relatively steadily since the depths of the recession – going from a mere $1.77 in 2009 to a price over $50 today, even after a recent selloff.
Wrath: Smith & Wesson
Sorry gun-lovers, but firearm manufacturer Smith & Wesson Holding Corp. (SWHC) has to be the stock representing wrath, as guns encompass the sin in a couple ways. Not only can the weapons themselves be used to express wrath, but wrath also seems evident when there is talking of taking the weapons themselves away.
In fact, chatter that stricter gun laws were around the corner following several tragic shootings actually pushed countless folks into gun stores — and subsequently pushed gun-maker stocks higher — early in the year, as they tried to snatch up the weapons to front-run any potential bans.
Smith & Wesson, for one, is slated to see earnings more than double this year alone, while 30% annualized growth is on tap longer-term. No wonder the stock has soared more than 36% in the past year, including a 14% climb year-to-date.
Status symbols come in all shapes and sizes, but there’s no doubt they all stem from envy — whether you’re the one flaunting wealth to make onlookers jealous, or the one drooling over the elite’s toys.
Luxury cars are an especially popular avenue for showing off, as they can be displayed even to random strangers on the street … and there’s no faking it. Unless you’re an expert, the same probably can’t be said with Coach (COH) purses or Michael Kors (KORS) diamonds.
That makes German automaker Daimler (DDAIF) — best known for its iconic and fabulous Mercedes-Benz line — a prime example of this sin.
The undervalued company recently snuck into the top five of InvestorPlace‘s Best Stocks of 2013 contest thanks in part to its high-end brand, which can weather currency fluctuations and downturns. As Charles Sizemore put it, “If you can afford a $70,000 car, then you’re going to buy the car you want.”
If you asks me, nothing says narcissism like social media. Just take Facebook (FB) — a platform touted for connectivity and staying in touch, but that more and more seems to be a gateway for bragging.
Whether you have a cute kid, a cute puppy, lots of friends or lots of fun, there’s hardly a better way to show it than to broadcast those qualities to your entire Internet circle of friends … and hardly a better way to gauge just how self-important you are than to tally up the “likes” you receive.
Of course, Facebook as a source of inflated, Internet-based self-worth might not last much longer. Younger users prefer alternatives like Twitter, and attempts at debuting new features haven’t been all that successful.
Meanwhile, the stock itself has shed more than 37% since its first day of trading just more than a year ago, and is double digits in the red for 2013.
Lust: Rick’s Cabaret International
Is there anything more lust-inducing than a lap dance?
If you’re thinking lap dances (well, and ones provided by a publicly traded company), you’ve gotta think Rick’s Cabaret International (RICK). The gentlemen’s club operator has locations across the U.S. and South America, including a New York location that brands itself as “the No. 1 strip club in the city, featuring the most beautiful women in the world daily.”
Yup. For lust, this one’s a gimme.
InvestorPlace contributor Larry Meyers discussed RICK late last year, touting it as a long-term bargain proposition. The first sentence in his bull case? “Forgive me, readers, for I have sinned.”
Of course, looking backward, Rick’s hardly seems like a stock you could go steady with (unsurprisingly). It has been a roller coaster over the past year, with its return ending slightly in the red thanks to the market’s recent downturn.
Still, 40% annualized growth expected to come during the next five years is plenty to lust after.
Sloth: Tempur Sealy
Tempur Sealy International (TPX) — the result of consolidation in the sleep industry bringing together Tempur-Pedic and Seayl — might market itself as a seller of fancy mattress made from NASA-researched material that will adjust to your form, but let’s be real: It’s just another way to get shut-eye.
There’s a fine line between getting the sleep we need, and staying curled up in bed all day watching TV and drifting off. I’ve never indulged in a Tempur-Pedic bed, but having a mattress that forms to your form seems like a recipe for the latter.
TPX stock might soon be struck with a case of sloth, too. While Tempur Sealy’s sales are expected to double year-over-year this quarter and next, that’s just because two brands are obviously better than one … but that’s not expected to trickle down to the bottom line, where growth for the year is expected to come in at a meager 6%.
Tempur’s stock has soared more than 83% during the past year, and 28% year-to-date thanks to the acquisition. That run-up still leaves TPX at a fair value — it’s trading at 12 times forward earnings, while five-year growth estimates also around 12% — but doesn’t seem to leave much room for continued outperformance.
Last but not least, we have the most delicious sin of all: Gluttony.
While there are countless ways to play this one, why not go with a huge food conglomerate that serves up snacks to millions of people every day?
PepsiCo (PEP) — although you might just associate it with the sugary soft drinks — is home to a laundry list of snack foods you’ve likely pounded and soon regretted. Just a few on its plate? Popular chips like Lay’s, Dorit’s and Fritos, along with a plethora of popcorns, cookies and snack bars.
That impressive arsenal — which is enjoyed across the world — has helped send PEP up a market-beating 17% since the start of 2013. All the while, investors got to snack hungrily on its 2.8% annual dividend yield — a payout it has increased for
Plus, it’s increased that dividend for an impressive 41 years in a row.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.