Teens And 20-Somethings Love Apple, Sony And Nike But Should Investors?

Apr 4 2014, 3:34pm CDT | by

Teens And 20-Somethings Love Apple, Sony And Nike But Should Investors?
Photo Credit: Forbes Apple

The 62 Brands Young Americans Love Most

Branding firm Moosylvania asked 1,000 people age 13 to 33 to name their three favorite brands. Of the 620 brands mentioned 62 came up five or more times. Apple was by far the most popular response, claiming 7.5% of the 3,000 possible answers. This does not include the people who answered iPad or iPhone, which also made the top 62. Next up was Samsung which claimed 4.8% of responses, Nike with 4.5% and Sony with 4.1%.

This 86 million strong age group controls $1.3 trillion in consumer spending, making them a prime target for companies with goods to sell. Moosylvania CEO Norty Cohen explained that while the sub-33 set sees themselves as independent, they are constantly seeking feedback from others and connect most with brands they see as friends.

But should young investors be buying up shares of their brand-friends? Only if they are prepared to love them for the long haul.

Of the 53 companies responsible for the brands named (like Apple, multiple Nike, Google, Gap, PepsiCo and Microsoft properties appear on the list) 44 are currently publicly traded. In recent years this group of stocks has underperformed the S&P on total return by a few percentage points. Where the S&P’s one-year total return is currently 24%, the brand group’s is 20%. This means if you invested $100 in the S&P a year ago you would have $124 today (including dividends), while you would end up with $120 by investing in your favorite brands.

Looking at the longer term, however, fortunes shift. The S&P’s five year total return is 147% versus the brands’ 240%. And going 10 years out the S&P’s 102% total reture is lapped by the brands’ 258%. So if the 13-year-olds surveyed invested $100 in the 33 relevant companies that were publicly traded when they were three years-old — ok if their parents invested — their untouched portfolio would now be worth $358. The same investment in the S&P would be worth $202.

Investor Peter Lynch famously argued that you should invest in what you know. These days a new generation is bringing a technological bent to Lynch’s credo. LikeFolio, for example, finds the brands that you and your friends are talking about via Facebook and Twitter and uses those mentions to help you find investing ideas. Co-founder Andy Swan says that investing in what you know “is not a silver bullet” but people have more “predictive power on companies than they might realize.”

Swan and his team found a huge increase in the amount people were talking about loving their Tesla Motors cars (which does not appear on the favorite brands list) months before the stock took off. He thinks Nike has room to grow off of increased mentions of relatively new products like Nike+ and Nike FuelBands that Wall Street hasn’t fully priced in. On the other hand negative chatter about Apple has picked up alongside the stock’s slow down.

Recently Facebook and Under Armour have  been among the best performers of the list bringing in one year total returns of  134% and 118% respectively. But on the flip side Aeropostale, JC Penney (owner of Sephora) and American Eagle Outfitters have lost 60%, 39% and 30% respectively.

A decade ago Facebook and Under Armour weren’t publicly traded (Facebook was just a few months old). So the companies with the best ten-year returns included Apple at 3,977%, Samsung at 668% and Amazon at 624%. Fan favorite Nike also has strong returns at 348%, but Sony has lost 52% of its value.


Follow @samsharf/>

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Europe's Galileo satellites launched into wrong orbit
Paris, Aug 23 (IANS) European satellite launch company Arianespace announced Saturday that the two satellites of Europe's Galileo satellite navigation system launched Friday from the European spaceport in French Guiana were delivered into the wrong orbit.
 
 
White dwarf stars formed mysterious supernova
London, Aug 23 (IANS) Supernova 2014J is 11 million light years away from earth and was only seen by chance at the University of London Observatory this year.
 
 
Universe's earliest stars were monstrous: Study
Tokyo, Aug 23 (IANS) Little is known about the universe's earliest stars but if we believe astronomers, they might have been hundreds of times more massive than the sun.
 
 
Killer fungus that grows on trees
New York, Aug 23 (IANS) A teenaged girl has helped scientists discover that a deadly fungus that generally attacks HIV/AIDS patients grows on trees.
 
 
 

Latest from the Network

Force India struggle in wet Belgian GP qualifying
Spa-Francorchamps (Belgium), Aug 23 (IANS) Force India drivers Sergio Perez and Nico Hulkenberg had a difficult outing in the Belgian Grand Prix qualifying Saturday and will start Sunday's race 13th and 18th....
Read more on Sport Balla
 
Simon Pegg finds watching himself hard
Simon Pegg sometimes finds it ''hard'' to watch his own movies. The 44-year-old actor - who has five-year-old daughter Matilda with wife Maureen - is very ''proud'' of his work but doesn't enjoying viewing them back as...
Read more on Movie Balla
 
Indian cueists bag Asian title
Karachi, Aug 23 (IANS) India A, consisting of Kamal Chawla, Faisal Khan and Dharmender Lilly, won the Gold medal in the Asian Snooker Team championship here Saturday, defeating Pakistan A 3-1 in the final. The Indian...
Read more on Sport Balla
 
Sri Lanka, Pakistan 2nd ODI shifted to Hambantota
Colombo, Aug 23 (IANS) The second One-Day International (ODI) between Sri Lanka and Pakistan was Saturday moved up to Aug 26 and the venue shifted to Hambantota after heavy rainfall here left the Premadasa Stadium...
Read more on Sport Balla
 
Stacy Keibler gives birth to daughter
Los Angeles, Aug 23 (IANS) Former wrestler-turned-actress Stacy Keibler has welcomed a girl child. The 34-year-old and her husband, Jared Pobre, welcomed their daughter, Ava Grace Pobre, into the world Wednesday, she...
Read more on Celebrity Balla
 
Britain mulls steps to combat extremism
London, Aug 23 (IANS) To discourage extremist elements originating from Britain, Home Secretary Theresa May has plans to bring in new laws that may strip Britons fighting in Syria and Iraq of their citizenship. May is...
Read more on Politics Balla
 
Europe's Galileo satellites launched into wrong orbit
Paris, Aug 23 (IANS) European satellite launch company Arianespace announced Saturday that the two satellites of Europe's Galileo satellite navigation system launched Friday from the European spaceport in French Guiana...
Read more on Apple Balla
 
Indian man commits suicide in UAE
Dubai, Aug 23 (IANS) A 24-year-old Indian man was found dead Saturday at his home in the United Arab Emirates (UAE), a media report said. The man, identified by his initials R.M., committed suicide by hanging himself...
Read more on Politics Balla
 
Boy killed in Israeli airstrike on Gaza
Gaza, Aug 23 (IANS) An eight-year-old boy was killed and three others wounded in a fresh Israeli airstrike Saturday afternoon on a house in the central Gaza Strip, medics said. Ashraf al-Qedra, the health ministry...
Read more on Politics Balla
 
Toll in Japan mudslides hits 49
Tokyo, Aug 23 (IANS) The toll in deadly landslides in the Japanese city of Hiroshima rose to 49 Saturday, while 41 people remained missing. About 2,800 rescuers continued their efforts in searching for survivors three...
Read more on Politics Balla