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10 Stocks for Canadian Hipsters
Many hipsters pride themselves on independent buying, free from the shackles of corporate products and entertainment. As it turns out, many of these anti-consumers aren’t quite as indie as their image proclaims. A look at some of the hipster gear below -- and the companies behind it -- reveals that hipsters and big business have a lot in common after all.
1. Apple (AAPL) The iPhone is the hipster phone du jour, especially when equipped with a Polaroid app and a mixtape case. And one share of Apple, currently hovering around the $400 mark, could buy all three.
Apple is in a class of its own, in terms of fashion and finances. The company enjoys an annual growth rate of over 30%, a 24% profit margin and a $375 billion market cap. Steve Jobs may be gone, but that hasn’t stopped new Apple products from inciting religious fervor in consumer masses.
Just as the mainstream constantly threatens to oppress the hipster, however, cheaper competitors like Android phones and the Kindle Fire continue to nip at Apple’s market share. In the past three months, for example, Apple smartphones constituted 28.7% of the US market, but Android phones made up nearly 47%.
Whether Apple will continue its powerful growth over the next several years is up for grabs. One thing is nearly certain, however. Like skinny jeans, Apple will take a long time to lose its coolness factor.
2. American Apparel (APP) The purveyor of hipster T-shirts and cotton spandex leggings is true to hipsters’ thrifty roots: American Apparel is a penny stock. Increasing cotton prices and an immigration inspection lost American Apparel 1,500 workers and $86 million in 2010. In 2011, the company narrowly avoided filing for Chapter 11 bankruptcy protection.
To offset its losses, American Apparel sold more than 20% of its stock to private investors at a clearance rate of 43% off. That activity doesn’t bode well for the future value of the stock. Once those investors cash in -- and CEO Dov Charney issues more stock, as is his habit -- American Apparel will find itself right back in the clearance bin.
Due in part to this year’s massive US warehouse sales, the company is reporting an increase in sales for the fourth quarter of 2011. This should help Charney keep enough money in the company coffers to pay off his steady trickle of lawsuits, which include one for firing an LA worker while he was on medical leave with cancer, and a grand total of seven sexual harassment suits. Hey, at least he’s not straight-laced, right?
3. Canadian Solar (CSIQ) The past year has been a bit cloudy for Canadian Solar. A poorer than expected quarterly earnings report last month didn’t help the Ontario-based energy firm’s stock recoup the two-thirds of its value lost since last June’s peak of $11.60.
The company has continued to expand, however, tripling its North American sales during the same recent fourth quarter it spent in the red. A recent announcement of the development of 11 new solar farms in the United States indicates to observers that Canadian Solar is still worth watching. As a big fish in the relatively small solar panel pond, the image-conscious can find appeal in the “alternative” while the eco-conscious glom on to the “energy.”
4. Groupon (GRPN) Although the exact percentage of hipsters who buy Groupons is unknown, one-fourth of Groupon’s subscribers are in the Millennial generation, which, with a 37% or more unemployment rate, by all rights should be seeking bargain-basement deals. Groupon, meanwhile, is finding out that only 25% of its 115 million subscribers -- those Millennials, perhaps? -- are actually buying daily deals. That translates to the company not making $633 million in 2011, despite taking up to 60% of the revenue from each daily deal it launches.
So far, low float is holding up Groupon’s stock value. Something has to give, or someone has to buy more, for the company to stand the test of time and competition. Hipsters, meanwhile, have more daily deals options than ever, including hipster-specific sites like the alt band and brand deal site 1band1brand.
5. Loblaws (LBLCF) Long regarded as a successful supermarket chain, and beloved for the President’s Choice line of premium products, Loblaws drew the notice of young Canadians in 2006 when introduced its Joe Fresh fashion line. The cheeky-chic label received instant attention from teens and twentysomethings, preceding an expansion of the casual brand into swimwear, accessories, lingerie, and other areas of the budget boutique market.
Following the success of several dedicated Joe Fresh retailers in the domestic market, Loblaws decided last year to bring its simple designs and bold monochrome palettes across the border. The USA’s first Joe Fresh storefront opened in Manhattan last November, challenging rivals like Gap (GPS) and American Apparel on their stomping grounds. That same month, Loblaws held the grand opening of a flagship location in the renovated Maple Leaf Gardens, the culmination of a decade-long effort to secure a new steward for the former “cathedral of hockey.” Can a traditional supermarket be any cooler?
6. Canadian Tire (CTC.TO) Of all the mainstream banalities that conspire to cheapen our existence, there is no worse offender than money. To every free thinker who has wondered why we don’t just get rid of cash if it causes so many problems, Canadian Tire has heard you. Canadian Tire money may not be the music- and fashion-based economy we have all dreamed of, but it’s about as close as we can hope to get.
Circulating in one form or another since the ‘50s, the colorful coupons emanate from that sought-after retro authenticity. You can’t yet buy or redeem stock for Canadian Tire, but grab up enough shares and you might be able to change things from the inside.
Investing in Canadian Tire could also prove healthy for your real world money, however. In 2011, Canadian Tire bought the Forzani Group, a sporting goods retailer, which gives the company a significant share of the national sports retail market. Now Canadian Tire is planning to expand its Sport Chek line by opening 100 new stores in the next five years. The move is part of the company’s offensive move to protect some of its turf before Target (TGT) arrives in Canada next spring.
7. RIM (RIMM) Let’s face it: Anywhere in the world, no other mobile technology designer has a shot at usurping Apple’s monopoly on casual cool. Hipsters, however, are all about adopting the unappreciated, and no firm is feeling more unappreciated right now than Research In Motion.
The BlackBerry may not be completely out of love -- President Obama and author Jonathan Franzen have both claimed to stand by the device. But step outside the White House and Casa Franzen, and the business that broke the smartphone market wide open in 2003 has been reduced to a joke, a punch line, a RIM-shot. The upside? RIM’s recent loss of over half its remaining market share year-to-date may have pushed the Waterloo, Ontario company far enough out of the mainstream that its products have earned a bit of indie appeal. Past BlackBerrys have proven a great fit for the alternative budget: The Torch model received a permanent 50% price cut less than a week after its 2010 release, and lacks enough features of contemporary Apple and Google (GOOG) offerings that it evokes the same throwback appeal as vinyl and VHS.
Though hipsters themselves never truly appreciate anything, speculators may have reason for sincere interest in the beleaguered former pioneer. Though a recently announced wave of job cuts may not inspire confidence in the former tech giant’s stability, between the potential for a new direction with the BlackBerry 10 and a rumored buyout by Facebook (FB), an investor seeking a serious gamble may find Toronto warmer than California.
(Also see: BlackBerry Deemed Coolest Brand in Shocking Survey.)
8. Pfizer (PFE) There are few better ways to temporarily eradicate existential angst than to pop a hipster’s little helper, the Xanax pill. The Pfizer product, a branded version of alprazolam, instantly transports you from acting like you don’t care to really, truly not caring. The pills work even faster if you chew them, as Jennifer Egan wrote in her award-winning latest novel A Visit from the Goon Squad.
Maybe Pfizer itself is on Xanax. Despite operating in nerve-wracking industry conditions, the pharma giant doesn’t outwardly appear to be panicking. The stock hit a new 52-week high of $21.83 on December 27, 2011, even with the dreaded patent cliff hitting global bestseller Lipitor on November 30. After significant layoffs and major R&D cuts, Pfizer hopes that cornering niche drugs will provide it with opportunities to offset the fallout from various expiring patents, which can take months to fully manifest. Revenues and earnings were up in the third quarter of 2011. The company has both a share buyback plan and higher dividend in the works.
Still nervous about investing in Pfizer? You know how to get some calm.
9. Tim Horton’s (THI) We admit it doesn’t get much more mainstream than Tim Horton’s, but the hyper-Canadiana-themed advertising, cops-eating-doughnuts jokes, and general folksiness of the country’s popular chain make this company easy for hipsters to “love” -- in an ironic way, of course. Canadians of all walks of life have been getting their “Tim’s” since its founding by the eponymous Maple Leafs alum in the ‘60s, and the truth is that the young and hip have been drawn in just as much as the gray-haired set.
Would Timmy’s be a good buy? The dividends on its stock (currently $54) have more than doubled in the last three years. That should fund your vintage sneaker collection.
And really, even in the anti-populist scene, only the most benumbed cynics are incapable of enjoying a Timbit or five.
10. Dorel Industries (DIIBF) There’s no indie in Schwinn fixies. Montreal-based Dorel industries, owner of Schwinn, is about as buttoned-down as a company gets. Dorel has a fat portfolio of baby products -- like those “Baby on Board” decals -- home furnishings and several brands of bikes. Thirty percent of Dorel’s sales are to a place whose fluorescent lights make hipsters burn alive, namely Wal-Mart (WMT). And in a salute to that disdained 1%, 70% of Dorel is controlled by one family.
Dorel stock was on the decline in 2011; where it will go next is anyone’s guess, but it doesn’t seemed poised for any major catastrophes outside of its usual range. And despite the multinational’s relationship with soccer mom-mobiles, yuppie road biker jerseys, and business-office Ameriwood desk sets, hipsters still ride Schwinn fixies.
- With research by Drea Knufken
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