ELVIS STOCK PORTFOLIO

Back on August 16, 2002, cable network CNN did something interesting to commemorate the 25th anniversary of Elvis’ death.  It ran an article on one of its websites – www.money.cnn.com — titled Viva the Elvis Portfolio.  The article started like this:  “Elvis may have left the building, but you can find a way to make him stay in your stock portfolio.”

 

CNN/Money listed 13 stocks for Elvis fans who wanted to invest in the King.  The stocks had a connection to Elvis, although a few would have to be considered a stretch.  Nike (NKE) had one of the strongest connections, because it had commercials running at the time using Elvis’ song  “A Little Less Conversation.”  Walt Disney (DIS) was another, because its recent hit film Lilo & Stitch featured six Elvis songs.  NBNA (KRB) also had a strong connection, because it was the bank that had issued Elvis credit cards.

 

Other good choices included:  American Greetings (AM) that produced greeting cards and Christmas tree ornaments with Elvis’ image; Department 56 (DFS) that marketed Graceland Christmas collectibles; International Game Technology (IGT), manufacturers of Elvis slot machines; MGM (MGM), the producer of Elvis movies; and Hilton Hotels, where he performed in Las Vegas.

 

In my opinion, the other five companies had fairly weak connections to Elvis:  Mattel (MAT), General Motors (GM), J.M. Smuckers (SJM), Mead/Westvaco (MWV), and Guitar Center (GTRC).  Mattel had a Barbie Doll wearing a poodle skirt with “Elvis” stitched on it.  Elvis owned Cadillacs made by GM.  Smuckers made grape jelly and peanut butter.  Mead/Westvaco, a huge paper company, had a tiny part of their business coming from Elvis calendars.  And Guitar Center was a place where Elvis ‘could’ have bought a guitar according to CNN/Money.

 

What if any loyal Elvis fans had followed CNN’s advice on August 16, 2002 and invested in the eight stocks with true Elvis connections.  How well would they have done? 

 

Keep in mind the trend in the stock market at that time.  Because of 9-11 and the collapse of the dot-com bubble, the market had been in decline for almost two-and-a-half years.  Most stocks and the major indexes bottomed out during the fourth quarter of 2002, and the trend since has been generally up.  So, we would definitely expect the ‘Elvis stocks’ to have made money.  Here are the results:

 

                                   8/16/02            4/26/07            Change

 

Nike                             $20.76             $53.84             +159%

Walt Disney                  $15.08             $35.18             +133%

American Greetings       $16.93             $25.61             + 51%

Int. Game Technology    $15.48             $39. 50            +155%

MGM                            $18.33             $70.53             +285%

Hilton Hotels                 $11.85             $35.19              +197%

 

Wow!  That’s impressive.  The CNN/Money article never actually advised people to buy these stocks, but that sure would have been a good call.  Two stocks could not be listed above because they no longer exist as separate corporate entities.  NBNA was part of the merger/acquisition trend to bigger banks, and Department 56 became part of the Lennox Group family of giftware and housewares. 

 

Stock performance is often measured against the major market indexes.  For the same period, the Dow is up 49%, the S&P 500 is up 61%, and the NASDAQ is up 88%.  So, relative to the broad market, the group of ‘Elvis stocks’ did great.  

 

Today, you actually can invest in Elvis.  EPE, Elvis’ estate, is now 85% owned by Robert Sillerman’s media empire CKX Inc.  (CKXE).  Back on March 20, 2005, in an Elvisblog article, I recommended buying some CKX stock.  It was selling at $26.73 at the time.  How good a tip was that?  Three months later, the stock was selling for $13.72.  Since then, it has bounced around and now sits at $11.73.  I don’t get it.  CSX also owns American Idol, and that is a money generating machine.  With Elvis Cirque du Soleil coming, as well as the projected new attractions at Graceland, I still feel like CKX has to be a growth stock.  However, it might be smart to follow CNN/Money’s recommendations rather than mine.

 

©  2007   Philip R Arnold   All Rights Reserved   www.elvisblog.net

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