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Valentine’s share tips: how to profit from love

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
10/02/2020

Valentine’s Day may be a time of chocolates and flowers but an alternative way to celebrate the day of love is to invest in companies that get a boost at this time of year.

Lee Wild, head of equity strategy at Interactive Investor, says: “It rarely makes sense to invest in individual company shares based solely on the outcome of annual events like Valentine’s Day. It’s not often that a single day is make or break for any large company, and expectations are already baked into share prices.

“However, there are plenty of great businesses that do receive a nice boost to profits when romance blossoms.”

InterContinental Hotels Group

A romantic night in a hotel is one elaborate way for romantics to impress their other half.

Wild says: “InterContinental Hotels Group may be in the business of providing spaces for guests to unwind but it’s stock market performance is no slouch. Having recovered from fears that coronavirus would hurt business, the shares are up 9% over the past year and 43% over five years.”

The Buckinghamshire-based multinational hospitality company’s roster of hotels includes InterContinental, Crowne Plaza and Regent Hotels.

Hotel Chocolat

They may not be as extravagant as a hotel getaway, but chocolates are the go-to choice for time-poor people – or the more forgetful among us who need to grab a last-minute gift the night before.

Laura Suter, personal finance analyst at AJ Bell, says: “Chocolate is an easy-win when it comes to Valentine’s Day presents and Hotel Chocolat, which is quoted on the London Stock Exchange, has seen its share price increase by over 50% over the last year.

“Smaller companies funds have taken a shine to luxury chocolate brand; ASI UK Smaller Companies for example has almost 3% of its portfolio invested in the high-end chocolate maker and delivered an investment return of 38% in 2019, putting it in the top 10 best performing funds in its sector.

“An alternative option is ETFS Cocoa. This exchange-traded fund is an interesting way to play demand for chocolate as it provides exposure to the raw material. It tracks the performance of the Bloomberg Cocoa Subindex, essentially moving up and down in line with the price of cocoa, and has climbed 25% in the last year.”

Burberry

Romantics who really want to make an impression on the big day may turn to luxury brands to impress their partner.

Adrian Lowcock, head of personal investing at Willis Owen, suggests Burberry.

He says: “Luxury items tend to be more resistant to global politics and are popular gift items not just in the UK but also overseas.

“This does have one downside, the coronavirus in China is likely to have a big impact on companies like Burberry where the brand has a strong customer base. Whilst the issue was impossible to predict it means the share prices have suffered recently and could provide a cheap entry point for an up market brand.”

Burberry is one of only five UK brands to feature in Interbrands top 100 and and it is the only luxury fashion brand in the FTSE 100.

Pfizer

If you’re looking for a slightly unconventional take on profiting from Valentine’s Day, Wild suggests Viagra manufacturer, Pfizer.

Pfizer developed Viagra to treat high blood pressure, but soon discovered it had other, potentially more lucrative side-effects.

“In the 22 years since launch, Viagra has changed the lives of millions, entered the cultural lexicon and made Pfizer billions of dollars. Its patent expired two years ago, hammering sales in the US, but demand elsewhere is holding up and Pfizer sold almost $500 million of Viagra in 2019,” says Wild.

“Pfizer’s stock market performance has been more volatile than rivals, plunging last summer after agreeing to merge its Upjohn division with generic drugs firm Mylan. Investors and ratings agencies alike were unimpressed. A recovery hit the buffers following another warning on sales last month, but the stock is not expensive and offers a dividend yield of around 4%.”