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

Five World Heritage sites severely damaged in Syria: Experts
Washington, Sep 19 (IANS) In war-torn Syria, five of six World Heritage sites now "exhibit significant damage" and some structures have been "reduced to rubble", reveals new high-resolution satellite image analysis.
 
 
New iPads and OS X Yosemite Reportedly Releasing in October 2014
New iPads and OS X Yosemite Reportedly Releasing in October 2014
Apple is rumored to introduce the new devices at a special event in the mid-October
 
 
Jony Ive Talks about the Designing Difficulties of the Apple Watch
Jony Ive Talks about the Designing Difficulties of the Apple Watch
The leader of Apple’s designing department talks about working with the next generation smartwatch
 
 
The Release of the Apple Health Kit Apps Delayed due to the Bugs
The Release of the Apple Health Kit Apps Delayed due to the Bugs
Apple informs that the launch of the Health Kit apps will not take place today, as it discovers a bug in the system
 
 
 

Latest from the Network

Scottish minister admits defeat
London, Sep 19 (IANS) Scotland's First Minister Alex Salmond Friday admitted defeat in the independence referendum. The official result will be announced later in the day. With results of 30 out of the country's 32...
Read more on Politics Balla
 
Drugs stopped me from fulfilling potential: Maradona
Buenos Aires, Sep 19 (IANS) Argentine football great Diego Maradona has admitted his drug addiction stopped him from fulfilling his potential as a player. In an interview with Argentine television channel Tyc Sports...
Read more on Sport Balla
 
Philippine withdraws peacekeepers from Golan Heights
Manila, Sep 19 (IANS) The Philippine government has withdrawn Filipino peacekeepers from the Golan Heights due to the deteriorating security situation in the area, a military official said Friday. Spokesman of the...
Read more on Politics Balla
 
Dozens apply for vacant Ghana coaching job
Accra, Sep 19 (IANS) The Ghana Football Association (GFA) has so far received dozens of applications from seasoned coaches to be considered for the vacant national football team's coaching post. Spokesperson Ibrahim...
Read more on Sport Balla
 
No ebola case reported in Malaysia: Minister
Kuala Lumpur, Sep 19 (IANS) Malaysian Health Minister S. Subramaniam Friday said that no case of the Ebola Virus Disease (EVD) has been reported in the country and there was no cause for the public to panic....
Read more on Business Balla
 
WICB, WIPA ink new agreement
Bridgetown (Barbados), Sep 19 (IANS/CMC) A new Collective Bargaining Agreement (CBA) and MoU, hailed as a critical turning point in the West Indies cricket, were inked between the West Indies Cricket Board (WICB) and...
Read more on Sport Balla
 
Real Madrid extend contract with Varene
Madrid, Sep 19 (IANS) Spanish football club Real Madrid announced they had extended the contract of central defender Rafael Varene until the summer of 2020. The 21-year-old French international arrived at Real Madrid...
Read more on Sport Balla
 
Caribbean among most vulnerable regions to climate change
San Juan, Sep 19 (IANS/EFE) Developing societies in the Caribbean are the most vulnerable economies in the Americas to climate change because the majority of the population lives in coastal areas, environmental...
Read more on Politics Balla
 
IS captures 21 Kurdish towns in Syria
Damascus, Sep 19 (IANS) The Islamic State (IS) terrorist group has seized control of 21 towns in a Kurdish-dominated region in Syria. The Syrian Observatory for Human Rights Thursday said that the IS has succeeded to...
Read more on Politics Balla
 
Poll shows Scots voted against independence
Edinburgh, Sep 19 (IANS/EFE) An unofficial poll by YouGov indicated that 54 percent of those who cast ballots in Scotland's independence referendum voted "no". Ninety-seven percent of the 4.3 million people eligible...
Read more on Politics Balla