A Favorite (and Lucky) Iconoclastic Stock Pick
The logical stock to boast about today is Hansen Natural (HANS). The "energy drink" producer was up 16% today on earnings and a distribution deal with Anheuser-Busch.
My favorite stock-picking technique is to find mega-trends that haven't been reported to death and invest in companies that will benefit. This strategy led me to Hansen. One mega-trend I've latched onto is the strong sales growth in "natural" and organic food. This trend has been well-documented for a long time, but I think it's underestimated. My iconoclastic take is that growing alarm over environmental degradation and toxicity is driving an emotional reaction to buy safer food as a self-protective measure. That makes me think that this sales growth isn't a fickle fashion choice but has real staying power.
When I went looking for stock plays in "natural" or organic food in 2004, I couldn't find many. It was a pleasant surprise when I discovered Hansen, which I remember from my first experience in a co-op grocery store as the vendor of premium bottled juices.
I was also surprised by how well the stock was doing, both before and after I bought some in October, 2004. The lucky part of this pick is that the market has latched onto Hansen's "energy drink" business, which has grown phenomenally, and the old juce business that got me interested in the first place is now pretty much a historical relic. So the spectacular success of this stock pick was based on ignorance and luck. I will add that other picks based on this theme have also done well, so my mega-trend analysis is still valid.
I have traded some shares of Hansen several times since I bought my first stake, though I've always kept a core holding. With the stock at $176, about $30 above a very nice 3-month trendline, it's very tempting to put on a tight stop for a few shares and look to buy it back cheaper when the inevitable correction comes. I have found that the longer I hold a stock, the less appetite I have for trading it. Partly it's a tax consideration, but I think a bigger factor is that it's easier to be a good boy and let winners run when I have a large paper gain. My decision for now is to leave my position alone.
My favorite stock-picking technique is to find mega-trends that haven't been reported to death and invest in companies that will benefit. This strategy led me to Hansen. One mega-trend I've latched onto is the strong sales growth in "natural" and organic food. This trend has been well-documented for a long time, but I think it's underestimated. My iconoclastic take is that growing alarm over environmental degradation and toxicity is driving an emotional reaction to buy safer food as a self-protective measure. That makes me think that this sales growth isn't a fickle fashion choice but has real staying power.
When I went looking for stock plays in "natural" or organic food in 2004, I couldn't find many. It was a pleasant surprise when I discovered Hansen, which I remember from my first experience in a co-op grocery store as the vendor of premium bottled juices.
I was also surprised by how well the stock was doing, both before and after I bought some in October, 2004. The lucky part of this pick is that the market has latched onto Hansen's "energy drink" business, which has grown phenomenally, and the old juce business that got me interested in the first place is now pretty much a historical relic. So the spectacular success of this stock pick was based on ignorance and luck. I will add that other picks based on this theme have also done well, so my mega-trend analysis is still valid.
I have traded some shares of Hansen several times since I bought my first stake, though I've always kept a core holding. With the stock at $176, about $30 above a very nice 3-month trendline, it's very tempting to put on a tight stop for a few shares and look to buy it back cheaper when the inevitable correction comes. I have found that the longer I hold a stock, the less appetite I have for trading it. Partly it's a tax consideration, but I think a bigger factor is that it's easier to be a good boy and let winners run when I have a large paper gain. My decision for now is to leave my position alone.
posted by Houyhnhnm | 10:54 PM
0 Comments:
Post a Comment
<< Home