Planning A Wedding Portfolio

June is considered the most popular month of the year for weddings. Even if brides-to-be have started doing their wedding planning six months to a year prior to June, it’s not too late to plan your wedding portfolio.

Let’s start with The Knot, Inc. (KNOT), traded on NASDAQ, which has a website that is the be-all and end-all of everything weddings. That includes calendaring services, shopping, planning checklists, and more. The price earnings ratio is 26 and the PEG is a favorable 1.55 [for those not familiar with the PEG, 1 is good, 5 is bad]. Its profit margin is over 32%. Get this: quarterly revenue growth is about 70% and quarterly earnings growth is over 885%! Are weddings back in style?

Now for the ring. For shopping online, there is Blue Nile Inc. (NILE). Also on NASDAQ, selling wedding rings, diamonds, and jewelry online. It has a fairly high P/E of 53, and a moderate PEG of 2.5. Quarterly earnings growth is just 8.8%. That could be due to the competition from the bricks-and-mortar [regular storefronts, not Internet] competitors such as Tiffany & Co. (TIF), which trades on the New York Stock Exchange and Zale Corp. (ZLC), also on the NYSE. Tiffany pays a yield of 1%, has a PEG of 1.66 and a P/E of 25. Zale has a similar P/E but a PEG of 2.66. In addition, its earnings estimates are expected to be negative.

Then we just need some flowers to round out the portfolio. You can order them online at 1-800-Flowers.com Inc. (FLWS). It has a fairly high P/E of 57 but an extremely favorable PEG of .98. Quarterly earnings growth is over 63%.

Congratulations. Now you are ready for your investment honeymoon.

Disclosure: Author does not have positions in any of the above.

Comments

[Frank Li:]

Are you saying that because many people get married in June, that's the time to buy the stocks? You'd need to back that assertion up with some historical proof that these stocks trade up going into June.

2007 May 15 03:06 PM