Did Fortune Brands
Contributing 32% of 2008 pre-charge operating income, Fortune's home products portfolio figures prominently in the company's overall success. The thing is, similar to the spirits segment, home products strongly tilt toward the premium end of the spectrum. With the exception of the Master Lock name, which could see a safety-inspired sales surge in line with the brisk handgun business reported by Cabela's
To advance the analysis, let's break out the sweet smell of gingerbread and fairy tales and assume that February's numbers indicate the beginning of housing market stabilization. Concerns remain. For example, might homeowners -- given the fact that they miraculously managed to remain homeowners -- experience a multi-year bout of contentment without the assistance of brand spanking new casement windows? Similarly, remodeling projects could take backseat to a preference for paying down debt.
As for necessary repairs, until the economy has demonstrated good behavior for several quarters, Mr. and Mrs. Fix-it may GPS-program their shopping cart for only the most affordable products. Take the Moen faucet name, for instance, which is a top revenue contributor for Fortune Brands at $850 million in 2008 sales. Numerous private companies offer alternative products in addition to the plumbing divisions of Masco
However, according to Fortune Brands, Moen is the No. 1 faucet brand in North America. Moreover, management has clearly tapped into important trends: KB Home
Indeed, there is a strong list of positives on Moen and Fortune's other home-related names, that is, as long as the overall economic environment is positive. When it comes to buying Fortune Brands shares, I'd wait for a clear indication that such is the case.
Fool contributor Mike Pienciak does not hold shares in any company mentioned. Cabela's is a Motley Fool Hidden Gems pick. Masco is a Motley Fool Income Investor recommendation. Fortune Brands is a Motley Fool Stock Advisor recommendation. The Fool's disclosure policy conserves water and other resources.