Q&A Time: New Year’s Resolution Stocks, Baidu, Hubbell and VistaPrint

Question:

Are there any stocks that get a boost from New Year’s resolutions? Gyms, diet plans or foods? For example, Life Time Fitness, GNC, or NutriSystem?

Answer:

It is possible that as these companies get a boost in business, the stocks may see a boost when they report earnings. However, before you invest, you should look at how profitable the companies are, as many in this space are new companies. GNC Holdings, Inc. (NYSE: GNC) is a specialty retailer of vitamins, minerals and herbal supplements. The company has been around a while and has been pretty solid. NutriSystem, Inc. (NASDAQ: NTRI) provides a weight management system where customers purchase food packages. The company appears to have a good business model. However, Life Time Fitness, Inc. (NYSE: LTM), who operates multi-use sports facilities, is a little more risky stock because it is competing against big names like Gold’s Gym and LA Fitness.

One stock you may consider is Whole Foods Market, Inc. (NASDAQ: WFM). Many people resolve to eat better foods, or perhaps, switch to organic foods, which is where Whole Foods may benefit. While the stock has been on the expensive side, it has been on a roll recently. The company has high margins; however, you may want to consider how much of a high flyer it is.

Question:

My broker has suggested I sell my Google shares for Baidu. 1. I’ve never heard of Baidu. 2. Google isn’t going anywhere. 3. Again, who the heck is Baidu?  Please weigh in.

Answer:

Baidu, Inc. (NASDAQ: BIDU) is the “Chinese Google” in that is a Chinese Internet search engine. Google, Inc. (NASDAQ: GOOG) had an interest in Baidu early on, but has since sold their shares. Google does not have the foothold in China as it does in other areas. If Google were to re-enter China, Biadu would provide strong competition. Baidu is a high quality company that meets our criteria. Its market cap is also significantly less than Google. The company had a 34% long term growth rate, as compared to Google, which has only a 15% growth rate. Overall, the company is cheaper than Google, and has more growth potential.

Question:

Hubbell raised its dividend, which I was pretty happy about. What do you think their growth will be like for the next few years?

Answer:

Hubbell Inc. (NYSE: HUB) designs and manufactures electronic products for residential and commercial construction. It is a boring, but consistent company that is rated A+ from Value Line for safety. It pays a 2.1% dividend, and its growth for the next three to five years is at 10.3%, which is good. If you own shares, this is one to hold. If you are looking for a holding in the industrial sector, this company may be worth considering. We suggest that an investor should hold out for A shares, as the B shares do not have voting rights. The majority of the A shares are family owned.

Question:

My company just started having our paper products printed at VistaPrint. The concept is pretty cheesy, as their ads are littered all over the internet. The truth is they have very competitive pricing vs. a local printer. How is the company behind the service?

Answer:

VistaPrint Limited (NASDAQ: VPRT) is expensive, trading at 37 times earnings. The company does not meet our Henssler criteria for investment based on its financial strength and safety. The company is an online vendor of printed marketing materials for personal and small businesses worldwide. While the company does offer a wide range of products and services at competitive prices, the valuation on the company appears elevated at this time, trading at nearly 40 times earnings. There has been some inconsistencies in the companies earnings as well with annual losses along the way. VistaPrint’s business is highly fragmented and highly competitive as consumers can easily produced many of VistaPrint’s products on their home computers. We would not recommend the purchase of shares at this time.

Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.

Share