These Brands Are Rising Through the Ranks

Some stocks burst on the scene amid glitz and fanfare while others simply seem to appear and grab hold of investor imagination. Whether it's by force of the story behind them or the unrelenting power of their performance year in and year out, these stocks are able to become household names, virtually synonymous with their industry and establishing a brand presence that is hard to shake.

Brand-spanking-new
Each year the market researchers at Interbrand compile a list of the top 100 global brands, and while perennial favorites like Coca-Cola have put their roots down on the list, others seem to appear from nowhere. For 2012, Coke remains the world's most valuable brand, not surprisingly, and Apple surged 129% to claim the second-place spot, but there are also six other companies that are making an appearance this year that weren't on the list in 2011.

Source: Interbrand "Best Global Brands 2012."

The ranking of brand power might be surprising considering that Facebook, for example, went public last year amid a lot of hoopla, and even after having lost more than half its value it still commands a $43 billion market cap. Yet it still loses out -- by a wide margin -- to diapers!

Yet the folks at Interbrand tell us that Pampers is the top-selling diaper in the U.S. and is Procter & Gamble's (PG 0.68%) best-selling brand in the world, raking in over $10 billion annually. The baby care segment for P&G owns 35% of the entire global market share,  contrasting with Kimberly-Clark's (KMB 1.28%) falling sales volumes for its No. 2 Huggies (don't worry, K-C owns the tissue market with its Kleenex brand, sitting at No. 80 with a brand value of almost $4.4 billion).

A willingness to pay up
The key to a brand's value is how much it drives a company's business. Not just in terms of financial performance, though that is indeed a key factor, but also in terms of how much the brand influences a consumer's decision to make a purchase. That could be why MasterCard is just breaking into the ranks while rival Visa (V 0.33%) is already established (at No. 74). The latter had an outsize presence at the summer Olympics, but the former's "Priceless" advertising campaign is helping to differentiate it from its peers.

Yet from down-market products like diapers to upscale luxuries like Prada, Gucci, Burberry, and even Ralph Lauren, it is the ability to transcend the economic angst of an era that gives them the ability to rise above their rivals. Luxury brands help Coach and newly public Michael Kors fulfill the needs of those who aspire to the apex of the market, but they will only be successful insofar as Prada and Louis Vuitton are able to define what constitutes the fineries of life.

Driving away a winner
For me, Kia is the most remarkable new entrant on the list. The workaday South Korean brand has proven itself to be every bit as resilient as its American counterpart Ford (No. 45 on the list) even as other foreign car manufacturers -- Honda, Toyota, BMW, and Mercedes -- rank even higher. Its ability to sell cars in domestic markets as well as throughout Europe in challenging times is a testament to the quality it has adopted as a core value.

It has been said it is almost impossible to go throughout the course of a day without using a key brand or product. From your toothpaste to your coffee, from the car your drive to the tools you use at work (digital and otherwise), you can't escape the power of brand. That's why investors would be smart to carefully consider each of these rising brand stars in their own right.

While I don't recommend simply racing out and buying their stocks based on their appearance on the list, they are ascendant in mindshare, so I will be rating them to outperform on Motley Fool CAPS, the 180,000-member driven investor community. By doing so, I hold myself accountable to my readers for the bullish CAPScalls I've made here.

Looking under rocks
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