Ahh. Life is sweet for Ravens fans as we watched the Super Bowl with a softly falling snow outside and our Old Bay spiced snacks. The cherry on top was our Jacoby Jones making a 108-yard kickoff return for a touchdown for B’More. What almost ruined the buzz was a number of mind-numbingly boring ads with few real standouts and notable omissions.
Who Was the Big Winner
The usual car, beer, phone ads cluttered up the airwaves with several notable no shows like Under Armour Inc (NYSE:UA), NIKE, Inc. (NYSE:NKE), Apple Inc. (NASDAQ:AAPL), etc. Again this year Budweiser, owned by Anheuser-Busch InBev NV (NYSE:BUD) , not only had a heartrending Clydesdale ad but its Bud Light New Orleans voodoo themed ads with Stevie Wonder, one featuring voodoo dolls and the other a “lucky” chair were funny and imaginative. Forbes also agreed that the Clydesdale ad was a winner and I thoroughly agree the GoDaddy.com ad with supermodel Bar Rafaeli tongue kissing the nerd was just a stomach-churner.
A surprise runner up was the Joe Montana-stain commercial for Tide — funny and unexpected in comparison to the usually bland ads from The Procter & Gamble Company (NYSE:PG) . Again, Forbes agreed it was a winner for Procter & Gamble. A risque but humorous ad came from first time Super Bowl advertiser Gildan Activewear Inc (NYSE:GIL). Toyota Motor Corporation (NYSE:TM) also ran a cute Wishes Granted campaign featuring CBS star Kaley Cuoco from The Big Bang Theory.
The main trend this year, which was a carryover from last year, is more “crowdsourced” content or ads in which facebook or online votes had a role, like the Lincoln Continental ad that was a result of 6,000 customer tweets; the Cokechase.com ad, which asked viewers to vote on the outcome; or the annual Pepsi Doritos ads created by average people, not ad agencies.
Another asked Oreo commercial viewers to weigh in on Instagram whether the cookie or the cream are better. Unfortunately for Coke and PepsiCo their ads were flat compared to campaigns of previous years. Monday morning quarterbacks loved the baby Clydesdale ads and Anaheuser Busch added a social media kicker allowing fans to suggest names for the foal.
Super Bowl advertisers’ stocks usually experience a bump running up to and shortly after the game as investors take the ads as showing confidence and willingness to promote the products.
Are These Investable?
Of course, any company that can afford to advertise during the Super Bowl is doing all right. CBS has been a big outperformer over the last year, up over 43% and trading at an 18.11 P/E. It has a 1.1% yield at an 18% payout ratio. The mass media company has low corporate risks except for compensation of $32.6 million to CEO Les Moonves and $11.76 million to founder and executive chairman Sumner Redstone, but I suppose 11 Super Bowl commercials will easily take care of that.
The company reports on Valentine’s Day and earnings will likely be sweet. Analysts forecast 14.9% 5 year EPS growth (yoy) and as a content provider it is sitting in the catbird seat with some of the most popular shows on air. However, competitor The Walt Disney Company (NYSE:DIS), which owns ABC, Disney Channel, and ESPN, has even more original content and you get the cruise lines and resorts as a New Orleans lagniappe (a special present thrown in for good measure).
Procter & Gamble totally and pleasantly surprised me. The usually straightforward, dull, and unassuming campaigns of the past are gone and P&G seems to be getting into the 21st century after all. P&G just closed at a 52-week high on Feb. 1 and still has a 3% yield, which it has doled out, year in and year out for 122 years and increased its share buyback as well.
There had been several analyst downgrades last year in the name as confidence waned in CEO Robert A. McDonald’s ability to create interest in the taken-for-granted brands. But the company beat on both top and bottom lines when it reported on Jan. 25 and raised guidance. Most exciting was that international sales were growing. Procter & Gamble is finally shaking off its reputation as just a widows and orphans stock. Still, waiting for a selloff would be advised.
Should you crack open some Bud stock? Anheuser-Busch InBev NV (NYSE:BUD) is trading close to its 52-week high and is one of a duopoly of beer companies along with competitor SAB Miller. It’s a premium brew at a 20.33 P/E and only a 1.4% yield. The company has a 31.82% operating margin. It’s also one of the oldest publicly traded companies in the world, founded in 1366 and headquartered in Belgium with over 200 beer brands.
The stock is up 44% over the last 52 weeks and even the thwarted merger with Grupo Modelo hasn’t held the stock down for long despite a downgrade by Societe Generale to hold last week after the Justice Department news. This is a name to wait on just as you’d wait for the barkeep to pull a long draft and let the head develop.
Final Score
The Baltimore Ravens win but so do shareholders of CBS, BUD, and Procter & Gamble, in particular. All three of these are trading close to 52-week highs so please wait for pullbacks. They will probably have a small run-up over the next few weeks, but if you already own them pat yourself on the back and enjoy your profits.
The article Who Won The Super Bowl Ad Race? originally appeared on Fool.com and is written by AnnaLisa Kraft.
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