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With Valentine’s Day upon us once again, I've decided to construct a portfolio of stocks that have produced strong late first quarter price appreciation related to strong sales during the holiday. Now typical logic would consider purchasing a stock in late January and selling it at the end of February in an attempt to absorb the post holiday stock price appreciation. The chart below describes the percentile returns on five different stocks that were purchased in late January and sold at the end of February.

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As you can see, selling these 5 stocks at the end of February will not provide any type of yield. In fact, one will lose about 3% of their portfolio.

That being the case, I have constructed the ideal Valentine’s Day Portfolio with an extended time frame. By investing equally in each of the stocks below starting at the end of January, and selling them at the end of March, one can theoretically expect a return of about around 30%.

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Now before you decide to open your E-trade or Scottrade account, let me give you some background on each of these companies, and explain why I think they should serve as a part of your Valentine's Day Portfolio.
Let us begin with a company I'm sure you are all familiar with: 1-800-Flowers (NASDAQ:FLWS). This company reported strong earnings last week, with revenue of $235.4 billion, up from the prior quarter. FLWS reported EPS of $0.21 with improving margins. While the company expects a slight negative impact due to the holiday falling on a Monday, out performance by the Gourmet Food and Gift Basket lines should be sufficient to cover the difference.
Now where does one typically take their significant other? Personally I plan on visiting Olive Garden, a chain of Italian restaurants owned by Darden Restaurants (NYSE:DRI). Dadren also owns Red Lobster, Longhorn Steakhouse, Bahama Breeze, and Capital Grill. All these restaurants serve (no pun indended) as an excellent choice for dinner on Valentines Day. Clarence Otis, CEO, stated. "As we expected, the economic environment continues to improve, and our brands continue to achieve competitively strong results." Additionally, on a year over year basis, Darden expects a 1% increase in their same-store sales. Another strong aspect of the company has been its increasing dividend. Currently, they yield about 2.5% a year, which can be expected to grow in the coming quarters. With strong margins, you can expect Darden to be a player in the restaurant business in the coming years.
We will move to Tiffany's and Co. (NYSE:TIF), who raised their outlook after strong holiday sales. Worldwide growth and sales have propelled them to the top of the jewelry industry. With a dividend yield of about 1.5%, you can't go wrong. With strong sales in 2011, I expect TIF to move back to the highs of 2007, with prices in the mid to upper 50s.
Hershey (NYSE:HSY), the company that makes just about all the chocolate we are going to consumer on Valentine's Day, has increased it's quarterly dividend by 8% to $0.35 cents per share. Additionally, with the stock firmly above its 50, 100, and 200 moving averages, I see no reason not to expect future price appreciation.


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The final company that would be an ideal member of the Valentine's Day portfolio is Walgreen's (NYSE:WAG). I elected to use Walgreen's because they offer a last second resort to any stragglers out there. Walgreen's provides great service to at a competitive price. If you are caught at work or were simply too lazy to buy gifts earlier, Walgreen's is the place to go. They provide all the amenities necessary to show love and affection for you're loved one, including chocolate (Hershey's), flowers, and small teddy bears. Walgreen's has achieved solid results through "continued focus on gross profit margins, cost control and the strategic slowing of our new store openings." With sales increasing sharply, you can bet their top line growth will be strong in the coming quarters.


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All in all, by incorporating these five stocks into a portfolio, we can expect a solid short-term appreciation in price. I do have a positive longer-term outlook for each of these stocks as well, so if your feeling ambitious, hold onto each of them companies.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DRI, HSY, FLWS, WAG, TIF over the next 72 hours.
Source: Top 5 Stocks for a Valentine's Day Portfolio and Beyond