The beautiful Canadian city of Vancouver plays is hosting a one-day conference next month in what is expected to be part of an ongoing discussion exploring women and the economy — and will provide some insight for shrewd investors about some hot stocks to buy.
Titled “The Next Billion: Women & The Economy of the Future,” the event is expected to include senior-level corporate executives from around the world, discussing how and why women are critical to the future success of businesses.
Presenting a who’s who of the corporate elite, one of the speakers is Halla Tomasdottir, the founder and CEO of Copenhagen-based investment firm Sisters Capital, which embraces three trends that it feels will shape the future economy: The Female Economy, The ‘Agequake’ of Mature Consumers and The Millennial Generation.
These three trends suggest to investors three stocks to buy — and each should deliver above-average returns over the next three years.
May the trends be your friends.
3 Trends and 3 Stocks to Buy: The Female Economy
As the Sisters Capital website reminds us, the female market represents a gigantic opportunity for businesses willing to embrace it. Those companies incorporating a permanent strategy for catering to this growing demographic are bound to benefit far more than those that don’t.
Which company best caters to the female economy? For my money, I’d have to go with Meredith Corporation (NYSE:MDP), the Iowa-based publisher of magazine titles such as Better Homes and Gardens, Everyday with Rachel Ray, Family Circle and Martha Stewart Living.
CEO Stephen Lacy told The Associated Press that everything it does on the publishing side of its business — MDP also owns 17 television stations — caters to women who are interested in information about food, the home, parenthood and health.
Meredith has accumulated a database of 100 million women with detailed information about almost a third of the U.S. population, a mighty powerful tool indeed.
While the company and MDP stock have had their troubles over the years, its current state of affairs is absolutely blissful. So powerful is the Better Homes and Gardens brand that it now sells more than $2 billion in branded merchandise through Wal-Mart Stores Inc. (NYSE:WMT).
Over the past three years it’s delivered a total shareholder return of 124%, far exceeding the S&P 500. In its most recent quarterly earnings report, MDP grew its operating earnings by 33% year-over-year on the backs of a 13% revenue increase. The company expects fiscal 2015 earnings per share to be at least $3.25 before special charges, far exceeding the $2.50 EPS of 2014.
Is it any wonder MDP stock is trading within 5% of its five-year high?
With a laser-like focus on millennial women — the children of the boomer women who helped build Meredith — MDP stock should continue to gain ground testing its all-time high above $60 within the next three years.
3 Trends and 3 Stocks to Buy: The ‘Agequake’ of Mature Consumers
It’s been over a year now since my 81-year-old mother moved into a nearby retirement home — and while the adjustment was an eye-opener at first, she’s come to the realization that the move was a wise decision.
As InvestorPlace contributor Charles Sizemore points out, 10,000 baby boomers (those born between 1946 and 1964) turn 65 every day; by 2030 there will be more than 132 million Americans older than 50, a tremendous strain on the system.
A healthcare REIT makes sense as one of our stocks to buy to take advantage of this trend.
Omega Healthcare Investors Inc (NYSE:OHI) is a Maryland-based investor in income-producing healthcare facilities across the U.S. With the April 1 completion of its acquisition of Aviv REIT, the combined business will own 874 facilities across 41 states.
Omega is the top-performing REIT over the past decade with total shareholder return of almost 600%. With a track record for making acquisitions work, the future appears even brighter than its past.
The best part of owning OHI stock?
Omega doesn’t get involved in Medicare, instead offering long-term triple-net master leases to operators of skilled nursing facilities (SNF) across the country. With more than double the SNF facilities of Ventas Inc. (NYSE:VTR), it’s definitely a leader in SNF investments in America.
But the opportunity in SNF has only just begun.
With almost 16,000 facilities in America, 87% of which are privately owned, the time for consolidation is upon us. There are 2,500 operators in the U.S. and many are interested in getting some liquidity through asset sales and sale/leaseback transactions providing significant growth prospects for Omega.
Over the past three years Omega has invested $2.5 billion in acquisitions, significantly higher than any of its peers. As consolidation rolls along look for OHI to make many more.
The aging of America will be great news for OHI stock over the next three years.
3 Trends and 3 Stocks to Buy: The Millennial Generation
So what do Millennials like?
“Fast casual dining, hotels, buying online, gaming (social and online, less so casinos), eating organic and healthy, and working out more,” says a recent report from Morgan Stanley.
The Morgan Stanley analysts listed 15 companies they believed would benefit from the specific likes of millennials. With names like Nike Inc (NYSE:NKE) and Starbucks Corporation (NASDAQ:SBUX) in the group of 15 it’s really hard to recommend just one. It also recommends three hotel companies: Marriott International Inc (NASDAQ:MAR), Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT) and Hilton Worldwide Holdings Inc (NYSE:HLT).
While I like all three choices I’m going with something a little more diversified.
My recommendation when it comes to the millennial generation is Walt Disney Co. (NYSE:DIS) for the simple fact that the combination of assets it owns including experience-laden offerings at its theme parks, resorts and cruises division makes it a business that can withstand tremors in one or more segments while still continuing to generate profits.
And heck, it doesn’t hurt to own ESPN, by far the most profitable cable network in the world. Estimates put the value of the sports network north of $50 billion, providing Disney with an excellent cash cow to build new cruise ships, etc.
Playing into the millennial’s desire for experiences is perhaps what’s behind Disney investing $250 million into DraftKings, an online fantasy sports business that allows users to bet on fantasy sports on a per-game basis rather than over an entire season or playoff run. In return, DraftKings is spending more than $500 million in advertising on ESPN.
Yahoo Finance’s Aaron Task described the deal:
“Fantasy sports has obviously grown incredibly in recent years. And one of the fine print of that deal is that this company, DraftKings, is going to have to spend money on commercials on ESPN. So it’s a sort of like Disney is using DraftKings as a middleman to give money to ESPN.”
With the cost of obtaining the rights to broadcast sporting events going up seemingly on a daily basis, the DraftKings deal provides ESPN with an additional revenue stream to more than offset any drop in operating profits it’s currently experiencing.
When it comes to millennials, DIS stock should be at the top of your list.
As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.