The following article is part of The Motley Fool's "Stock Madness 2006," based loosely on the annual NCAA College Basketball Tournament, a.k.a. "March Madness." Throughout the competition, our writers and analysts will engage in head-to-head competition. You, dear readers, are the fans and referees -- after you read these exciting duels, your votes will determine who moves on to the next round of play. The writer who survives the tournament will be our champion and most valuable "coach."
But please, make no mistake -- "Stock Madness 2006" is a GAME!
Consumer brands and social trends are where it's at with my team, despite their hailing from many different industries and addressing different kinds of consumers.
Let's start with an Internet play, Yahoo! (NASDAQ:YHOO). From where I stand, this Internet giant -- and household name -- seems to really "get" where the Internet is going. (See: Web 2.0, people!) It's recently shown interest in user-generated content and social-networking elements and even recently embraced the mashup phenomenon. With a massive user base and careful groundwork being laid, Yahoo! should be sitting pretty for the long term.
I have a few retailers in the mix, too. Lately, negative sentiment regarding many apparel retailers has sent Urban Outfitters' (NASDAQ:URBN) stock into the doldrums, but I'd say that currently presents a better opportunity to get in the game than has been available for years now. With the great competitive advantage inherent in this lifestyle brand's funky wares, as well as ample room for growth, Urban Outfitters has plenty going for it.
Coldwater Creek (NASDAQ:CWTR) may not be the hottest retail name in terms of consumer buzz, but look at the performance for this retailer, which targets female baby boomers' wallets. Last quarter's earnings numbers implied that the "cold" in its name is a bit of a misnomer.
Meanwhile, you may hear a lot about steakhouses, but I've included a play that many people likely forget about -- RARE Hospitality (NASDAQ:RARE). This small-cap stock is behind chains such as LongHorn Steakhouse, Capital Grille, and Bugaboo Creek. Don't mock it -- compare its P/E with those of chains such as Ruth's Chris (NASDAQ:RUTH) and Texas Roadhouse, and you'll get the picture.
Last but not least, many automakers have been feeling the pain lately, but not Toyota (NYSE:TM). This Japanese automaker's got a whole selection of wildly popular car models while our own domestic Big Three have metaphorically stalled out. Toyota has actually become the second-largest automaker, after GM (NYSE:GM). Furthermore, Toyota has been a pioneer in hybrid technology. Given the recent pain at the pump and President Bush's own recent statement that we're a nation addicted to oil (and I know that was no news flash for some of us), there are plenty of reasons to believe Toyota's well-positioned.
Having one superstar player is one thing, but it's the strong group with the great teamwork that most often leads to the best plays.
Jeremy MacNealy's rebuttal
I can admire the playing skills of Urban Outfitters -- I own shares in it as well. But Guess? and Dress Barn have already proved that they have enough ability to hang with this apparel retailer. And who can deny that Toyota has been making a better car than the domestic alternative? Comparing it, however, to industry-dominating enterprises like Apple Computer in the emerging media distribution market and Avid Technology in the digital video/audio production industry is just not fair -- and I expect their winning ways to continue.
Will the combined strength of Alyce's team beat Jeremy's superstar player, Apple? Check out Jeremy's team, and then cast your votes to declare the winner.
Alyce Lomax and Fool contributor Jeremy MacNealy both own shares of Urban Outfitters. Jeremy also owns shares of Apple. The Motley Fool has a disclosure policy.
