While Many Hope For a Quick Fed Meeting 2015, Others Find Safe Haven Investments For Their Portfolio
Nowadays the safe havens have come in the form of necessity industries. We need access to medicine, food, & even spirits; these are all industries that thrive in economies & markets like we’re seeing after the recent market sell-off.
Since “the transaction” back in July, KraftHeinz (NASDAQ:KHC) has seen generally a static market, trading between $71 & $81.20. The deal has resulted in the company becoming the third-largest food & beverage company in N. America & the 5th largest internationally valued at $28 billion. Though the company has struggled in recent years to appeal to consumers’ shifting tastes, the organization has an arsenal of brands that shoppers are eating up. Last year, Kraft, which includes brands such as Oscar Mayer, Planters & Maxwell House, spent $513.9 million on U.S. measured media, according to Kantar Media. Currently Starcom USA handles the US spending for Kraft. KraftHeinz (NASDAQ:KHC) has a current yield of 2.9%, paying a quarterly dividend of $0.55/share. Even if the market takes a short-term turn, the dividend is always an added benefit. KHC closed Friday at $72.27.
CVS Health Corporation (NYSE:CVS) has seen a minimal impact as well after Friday’s dramatic market sell-off. Though the stock closed down a little more than $2 a share, the stock price maintained a level above the 200-day MA. CVS’ valuation has risen nearly 14% since the beginning of 2015. The June announcement of the company purchasing Target’s (NYSE:TGT) pharmacies & clinics gave investors more confidence where CVS Health Corporation (NYSE:CVS) will now have access to new selling channels.
The focus has been on building a foothold in specialty businesses like Minute Clinics & Target pharmacies. Sales increased by 21% year/year in 2Q15 & CVS added 11 net new clinics in the quarter bringing the total to 997. It also helps that Berkshire Hathaway (NYSE:BRK.B) & Jorge Lemann’s 3G own more than 50% of the company with a combined 51.1% stake in the company (Berkshire holds 26.9%, 3G owns 24.2%).
Though it isn’t a large conglomerate like KHC, Barfresh Food Group, Inc. (OTCQB:BRFH) is in the food and beverage market and has weathered this latest market storm. The company through it’s wholly owned subsidiary Smoothie Inc, is a manufacturer and distributor of ready-to-blend beverages that were launched in response to the market need for an innovative method to produce blended beverages quickly and more profitably because prior to Barfresh entering the market, smoothies were time and labor intensive to produce and generated a large amount of waste. Barfresh Food Group, Inc. (OTCQB:BRFH) has acquired the North America intellectual property for its unique “ready to blend” ingredient packs (including the patent pending rights) that combines all the ingredients of a great smoothie into an individually pre-portioned pack containing real fruit pieces, low fat frozen yogurt or sorbet, fruit juice and even the ice.
During the better part of the last two years the stock has risen by as much as 313% from lows of $0.22 in September 2013 to highs of $0.909 this past May. Though the stock has consolidated in recent weeks, losses have been pared by dramatic increases in sales. In fact the company recently reported on its fiscal first quarter operating results. Riccardo Delle Coste, the Company’s CEO stated, “Our first quarter fiscal year 2016 sales increased 173% from the year ago quarter. In addition, sales in the first quarter exceeded the last three quarters of last year combined. Additionally, ordering trends for July and August have continued at a strong pace. Our business model is gaining momentum as we continue to hire sales representatives and achieve wins for our distribution business, and our large national accounts.”
In the small cap space, Progressive Care Inc. (OTCPK:RXMD) through its subsidiary Pharmco LLC has realized incredible growth over the last 18 months through largely increasing the reach within the South Fla. market & achieving quarter over quarter increases in prescription volume. The company ended 2014 with revenues of $11 million & after the first two quarters of operation is on pace to top that by the end of ’15. In a recent independent analyst report, not only has the stock received a buy rating & short term price target of $0.03 but the analyst also cited several key reasons for growth. These included healthcare consolidation as well as the region itself, Fla. being one of the top five med-tech job producers in the country .
Results from Aug. show that Progressive Care Inc. (OTCPK:RXMD) has grown. The pharmacy filled over 16,500 prescriptions during the month resulting in approximately $1.17 million in revenues. This is a 32% increase over the same month last year & the third consecutive month of record prescription sales in 2015. Prescriptions filled in August were 3% higher than July.
Over the last 8 months the stock has seen prices spike as high as $0.08 & $0.049 in more recent weeks. The $0.03 short-term target appears to be attainable with the risk being the company’s current debt reduction mechanism in place. Though this has been a source of dilution, Progressive has not let it go unnoticed & has kept the public updated as much as possible. As of the last PR that included information on such instances, the company had extinguished over $1.28m through its 3(a)(10) transaction. Being that this was just recently stated, it would stand to reason that this number would be greatly different taking into account the total amount of volume the stock has seen especially during recent trading sessions.
Time Warner Cable (NYSE:TWC), which also offers a quarterly dividend of $0.75 per share from a current yield of 1.6%, has found itself in the midst of a much larger bull run. Despite the last two days of negative selling, Time Warner Cable (NYSE:TWC) has enjoyed a significant increase in share price as compared to the first 5 months of the year. In fact compared to this time last year, shares have increased by more than 30% following highs at the beginning of the month of August at $194.22.
As one of the stocks in Soros’ portfolio (2.7%), the hedge fund manager has a 1.5million share stake as reported in the most recent quarter. The rally has been driven by revenue growth, increased performance over the first half of ’15, as well as the overall return on equity. As with many “safe stocks” cash flows & growth have been constant with net operating cash remaining above $1.6million & ROE exceeding both its industry’s average & the S&P.
Constellation Brands (NYSE:STZ) also found ways to weather the storm. Though the stock did tumble recently, but the price has been on an upswing since hitting lows last Oct. Since that time, shares of Constellation Brands (NYSE:STZ) have moved up from $80.70 to highs of $130.42. Whether people are happy or sad, more than likely an adult beverage can be found close by. The creation of their new investment arm has been of interest & the latest investment into Chicago’s Crafthouse Cocktails has sparked interest. Though details of the transaction weren’t disclosed, it is confirmed that Crafthouse will continue to operate independently in the production & marketing of its products. This 1st venture by its investment arm, Constellation Ventures, gives the company added focus on identifying smaller scale opportunities related to innovative categories within several alcohol market segments.
These are just opinions and you should always consult your broker before making an investment decision, Full disclaimer and more information here.