There are more than two feet of snow on the ground here in Baltimore. Meanwhile, record warmth has hit the Vancouver area. Go figure.
Nevertheless, Canada’s westernmost metropolis is hosting the Winter Olympics starting this Friday, and that’s where I’m looking for stock picks.
So let’s look at some sponsors of the snowy season’s premier athletic showcase and see where they line up on the market’s medal stand.
Vancouver Olympic Stocks
A wide range of international companies have ponied up the money to get their names on placards and on TV during the Games. We’ll see the familiar logos of U.S. corporate giants Coca-Cola (NYSE: KO), General Electric (NYSE: GE), and McDonald’s (NYSE: MCD) all over the commercials and sidelines.
Those three blue chips have all done relatively well over the past year. Let’s look at why.
Coke shares are up 22% since last February. Heading into Q4 earnings, we can expect the company to reiterate its focus on developing well-managed supply chains in emerging markets like India and China.
As wealth spreads across those countries and rural citizens get more of a taste for sweet, fizzy soda, Coca-Cola’s fortunes depend on beating Pepsi (NYSE: PBG) in distribution. Coca-Cola shares are sitting right at $53 per share, where support was established in October and November of 2009.
General Electric has gained 41% over the past year on improving demand for durable goods — the kind of heavy-duty machinery and systems GE cranks out as well or better than anyone in the world. Under CEO Jeff Immelt, GE is pushing its earnings expectations not just with big ticket domestic orders, but also with cleantech and green industrial acquisitions.
Two Brazilian companies have already asked GE to provide turbines for new wind farms that are being developed there in South America’s top market, and across the world GE China President and CEO Jeff Norbom says he "absolutely" sees a recovery beginning to happen in China’s manufacturing sector. GE wants to become an integral part of the Middle Kingdom’s industrial landscape, partnering with companies like China Shenhua Group to develop clean coal technology and selling manufacturing systems to local manufacturers as they move up the value chain from cheap plastic and clothing to major equipment. Losses at GE’s financing arm GE Capital are worrisome to some GE watchers, but the company’s core operations are moving along.
McDonald’s comes in last in this heat when you look at share price (it’s only up 8% in the same year), but income investors are still saying "I’m lovin’ it!" when it comes to Mickey D’s dividends. Unlike GE, which drew much market consternation when it cut its dividend last year, McDonald’s is continuing its 34-year track record of raising dividends. MCD shareholders can expect at least a 55 cent payment per share next quarter, as opposed to GE (10 cents) and Coca-Cola (41 cents).
Those are the big dogs you expect at the Olympics. Their businesses won’t be made or broken based on how many slaloms they’re associated with or which logo is closest to center ice.
But I’ve found a few lesser-known international companies that stand to expand their fan — and investor — base by a lot this February…
Here’s My Medal Stand for Olympic Sponsors
Since I’ve just highlighted a few mega-cap American companies, why don’t we start in the host country this time?
Teck Resources Limited (NYSE: TCK) has gained an astounding 663% dating back to this time last year, and even allowing for a pair of property sales in Mexico and Ontario, bulls have rewarded the Vancouver-based board of this copper company with higher highs and higher lows.
The former Teck Cominco operates mines that pull copper, metallurgical coal, gold, zinc, and even molybdenum out of the ground. Teck is also part of three projects in the Oil Sands of Alberta, where it’s partnered up with Calgary’s UTS Energy (TSE: UTS).
Teck is down 18% since early January due to projected weakness in copper prices (specifically potential decreased demand from China). It’s good to see a healthy pullback after nosebleed highs like TCK shareholders have seen since last winter, but this is our gold medalist among the Vancouver Olympics sponsors for sure.
I’m giving the silver to Aggreko, a Scottish company that trades in London as AGK and on the pink sheets as ARGKF. Aggreko rents generators, heaters, and cooling systems for operations like movie sets or even the Olympics, where onsite power and temperature control needs are huge.
Aggreko’s purchase of GE Energy Rentals back in 2006 moved Aggreko into the U.S., China, and other key worldwide markets where the conglomerate’s leasing arm had operated. In the 2008 Beijing Olympics, Aggreko delivered units to keep athletes cool.
See You at the Next Olympiad!
On Super Bowl Sunday, Aggreko Event Services kept The Who rocking onstage with 47 miles of cable. During the 2010 Olympics, they’ll keep everyone from snowboarders to bobsledders warm between races.
AGK shares have gained nearly 117% in the past year to just under 9 pounds currently. Like most of the global market, this stock is trading sideways to a bit downward, so use caution and limits when buying.
The bronze goes to France’s Atos Origin, the Olympics’ technology partner. Atos Origin’s IT consulting services will keep the ones and zeroes flowing smoothly throughout the Games as hordes of media members and organizing officials e-mail, Skype, and generally strain British Columbia’s bandwidth.
Atos Origin is listed on Paris’s Euronext exchange as ATO, and on the pink sheets AEXAF. It’s only up 51% since last February, but the company is pushing into new territory to drive earnings. Atos Origin is tapping the budding Green IT sector with its Atos Cloud program, which will bring carbon accounting and energy efficiency infotech into investors’ earnings stream. That happens to be the next frontier of cleantech investments we’re looking at in the Green Chip International recommendation service, too.
This year’s medalists can move ahead or fall back plenty before the next frozen Olympiad rolls around, so of course we’ll look for other corporate sponsor stars on the horizon.
In the meantime, keep your eye on these six companies and see what other stocks you can pick out during the Vancouver Games!