Stocks That Are In The Business Of Love (HSY, FLWS, TIF & IAC)

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    Hershey's Chocolate World

    The latest market volatility was enough to get the heart pumping, if not close to collapsing, just in time for Valentine’s Day.  Now that things seem to have calmed down, let’s take a look at stocks of companies that depend on love to drive their bottom line.

    Chocolate is the first thing that comes to people’s minds on Valentine’s Day.  There is no better way to show love then with some chocolates for your special sweet heart.  If your special someone doesn’t like milk chocolate, don’t forget The Hershey Co. (NYSE:HSY) makes mints, hard candy like The Jolly Rancher and popular confections like Reese’s, Kit Kat, Twizzlers and Ice Breakers.

    Early Tuesday afternoon, HSY shares were slightly down 0.28% to just under $100 a share.

    In the last 12 months, the stock has lost 8% while revenues rose 1% to $7.5 billion. Hershey currently has a market cap of $20.96 billion.

    The company’s operating margins have been in a five-year decline, but it has consistent growth in revenue per share and its dividend yield is close to a five-year high.

    I believe you will pay a premium for HSY stock as fair value is probably around $75.00 per share.

    1-800-Flowers.com Inc. (NASDAQ:FLWS) considers Valentine’s Day its second-biggest earnings day. Mother’s Day is the biggest driver of one day sales of flowers.  Why not?  Isn’t giving flowers to your mother more important?  However, Christmas season is actually the biggest holiday and busiest time for the New Jersey-based company, mainly because Christmas is probably longest lasting holiday.  Christmas essentially starts after Thanksgiving, if you are in the U.S.

    1-800-Flowers will deliver about 16 million flower stems for Valentine’s Day. Ten million of those will be roses, the only one that matters in expressions of love.

    It also does business outside of flowers.  About 57% of revenue is in sales of gourmet foods: Harry & David, Cheryl’s Cookies, The Popcorn Factory and Simply Chocolate.

    1-800-Flowers was up 0.23% to just under $11 on Tuesday. In the last 12 months, the stock has jumped by 6% and is close to a two-year high.  The revenue per share has been in decline over the past 12 months.

    The company has a market cap of nearly $700 million.

    I believe you will pay a premium for FLWS stock as fair value is probably around $8.90 per share.

    Tiffany & Co. (NYSE:TIF) does a lot of business around Valentine’s Day. The jeweler has a 180-year history in selling timepieces, sterling silver goods, china, crystal and accessories.

    On Tuesday, the stock was trading under $101 a share, up 0.24%.

    The company has good signs of health: consistent growth in revenue per share and expanding operating margins.

    The stock price is close to a 10-year high and has a market cap of $12.6 billion.  This company has historically been a strong performer.  Everyone loves the bling and the ultimate way to show a person they worth it is to give them the most expensive jewelry money can buy.

    I believe you will pay a premium for TIF stock as fair value is probably around $70.00 per share.

    InterActiveCorp (NASDAQ:IAC) owns and operates online media companies like Match.com, the world’s largest online dating service.

    InterActiveCorp was up almost 2% in Tuesday trading to $142.92 a share. The stock price has increased 88% over the last 12 months as revenue has increased to $3.3 billion.

    Might want to watch out for IAC because asset growth has been faster than its revenue growth. The revenue per share growth has slowed down, however the company has a high Piotroski F-score, suggesting it is no where near bankruptcy. The price-to-sales and price-to-book ratios are close to a 10-year high.

    I believe IAC stock is very overvalued because fair value is probably around $70.00 per share.  It’s earnings growth would have to be 18% or more to justify its current valuation.