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May 1, 2013, 10:06 a.m. EDT

Stay away from sin

Commentary: The top performers weigh in on sin industry stocks

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By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) — Avoid sin.

No, MarketWatch isn’t turning into a religious site featuring sermons with pithy titles from last Sunday.

/conga/story/2013/05/trading-strategies.html 260661

Instead, I am simply reporting what the top performers think of “sin” industry stocks — liquor, tobacco, casinos, and fast food.

By “top performers,” I mean the group on which I focus each week in my companion service, Hulbert On Markets. The group contains those advisers on the Hulbert Financial Digest’s monitored list who have beaten a buy-and-hold in the stock market over the last 15 years. I then restrict the group even further to include just the 15 of them with the best returns over the trailing 12 months.

The table below lists all the “sin” stocks that currently are recommended by at least two of the more than 200 advisers monitored by the HFD. The stocks are segregated according to their Dow Jones industry classifications: Brewers, Distillers, Tobacco, Gambling, and Restaurants & Bars. I also show group totals for each industry; note carefully that, because I don’t list the stocks that receive just one buy recommendation from monitored advisers, these industry totals don’t necessarily equal the sum of the recommendations for the stocks actually listed.

Notice that many of these stocks receive quite a few buy recommendations from the entire group of advisers monitored by the HFD. But the majority of the stocks in the table below don’t receive even one buy recommendation from a top performer.

Industry/Stock # recommendations from all monitored advisers # recommendations from “top performer” subset
BREWERS 8 1
Molson /zigman2/quotes/205165133/composite TAP   3 1
Boston Beer /zigman2/quotes/205338227/composite SAM   2 0
Companhia de. Bebidos   2 0
DISTILLERS & VINTNERS 7 1
Diageo PLC /zigman2/quotes/208129584/composite DEO   6 1
TOBACCO 31 6
Philip Morris Int’l /zigman2/quotes/201611010/composite PM   11 2
Altria /zigman2/quotes/208895754/composite MO   8 2
British American /zigman2/quotes/210207837/composite BTI   2 0
Schweitzer-Manduit Int’l /zigman2/quotes/208081440/composite SWM   2 0
Reynolds American   2 0
Vector Group /zigman2/quotes/206349225/composite VGR   2 0
GAMBLING 12 1
RESTAURANTS & BARS 34 6
McDonalds /zigman2/quotes/203508018/composite MCD   8 3
Yum! Brands /zigman2/quotes/209029767/composite YUM   4 0
BJ’s Restaurants /zigman2/quotes/205505197/composite BJRI   3 0
Chiptole Mexican Grill /zigman2/quotes/200781108/composite CMG   3 0
Starbucks /zigman2/quotes/207508890/composite SBUX   3 0
Buffalo Wild Wings   2 1

To put into perspective the low number of top-performer buy recommendations for these “sin” stocks, consider that the stocks currently most popular among these top performers, regardless of industry, are each recommended by six of them. There are two such stocks at the head of this hit parade, in fact: AT&T /zigman2/quotes/203165245/composite T +0.46%   and Pfizer /zigman2/quotes/202877789/composite PFE -0.53%  . In contrast, the most popular of the “sin” stocks listed in the table is McDonald’s, which is currently recommended by just three top performers — or half as popular.

And the industry (regardless of affiliation with sin) that receives the greatest number of buys from the top performers has a total of 22 such recommendations. That’s more than three times as popular as any of the “sin” industries listed in the table.

The industry that is the most popular right now among the top performers is pharmaceuticals. Might that be a reflection of the huge profits to be made treating the conditions and illnesses associated with sin?

Click here to learn more about the Hulbert Financial Digest.

/zigman2/quotes/205165133/composite
US : U.S.: NYSE
$ 44.97
+0.12 +0.27%
Volume: 1.80M
March 2, 2021 4:03p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$9.75 billion
Rev. per Employee
$567,882
loading...
/zigman2/quotes/205338227/composite
US : U.S.: NYSE
$ 1,066.98
-27.50 -2.51%
Volume: 84,239
March 2, 2021 4:00p
P/E Ratio
68.76
Dividend Yield
N/A
Market Cap
$13.33 billion
Rev. per Employee
$718,007
loading...
/zigman2/quotes/208129584/composite
US : U.S.: NYSE
$ 160.74
+1.38 +0.87%
Volume: 384,428
March 2, 2021 4:00p
P/E Ratio
63.32
Dividend Yield
2.20%
Market Cap
$93.65 billion
Rev. per Employee
$532,469
loading...
/zigman2/quotes/201611010/composite
US : U.S.: NYSE
$ 85.07
+0.12 +0.14%
Volume: 3.56M
March 2, 2021 4:00p
P/E Ratio
16.49
Dividend Yield
5.64%
Market Cap
$132.29 billion
Rev. per Employee
$404,183
loading...
/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 44.72
+0.18 +0.40%
Volume: 7.76M
March 2, 2021 4:04p
P/E Ratio
18.64
Dividend Yield
7.69%
Market Cap
$82.79 billion
Rev. per Employee
$2.94M
loading...
/zigman2/quotes/210207837/composite
US : U.S.: NYSE
$ 35.75
-0.06 -0.17%
Volume: 4.11M
March 2, 2021 4:00p
P/E Ratio
10.01
Dividend Yield
8.29%
Market Cap
$81.14 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/208081440/composite
US : U.S.: NYSE
$ 47.27
-0.83 -1.73%
Volume: 109,276
March 2, 2021 4:00p
P/E Ratio
17.78
Dividend Yield
3.72%
Market Cap
$1.51 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/206349225/composite
US : U.S.: NYSE
$ 13.78
-0.33 -2.34%
Volume: 595,995
March 2, 2021 4:00p
P/E Ratio
23.21
Dividend Yield
5.81%
Market Cap
$2.18 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/203508018/composite
US : U.S.: NYSE
$ 208.67
+0.42 +0.20%
Volume: 3.02M
March 2, 2021 4:00p
P/E Ratio
33.10
Dividend Yield
2.47%
Market Cap
$155.27 billion
Rev. per Employee
$96,039
loading...
/zigman2/quotes/209029767/composite
US : U.S.: NYSE
$ 104.74
+0.23 +0.22%
Volume: 2.45M
March 2, 2021 4:02p
P/E Ratio
35.57
Dividend Yield
1.91%
Market Cap
$31.36 billion
Rev. per Employee
$148,737
loading...
/zigman2/quotes/205505197/composite
US : U.S.: Nasdaq
$ 58.25
+0.04 +0.07%
Volume: 256,021
March 2, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$1.30 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200781108/composite
US : U.S.: NYSE
$ 1,475.57
-9.38 -0.63%
Volume: 258,013
March 2, 2021 4:02p
P/E Ratio
118.10
Dividend Yield
N/A
Market Cap
$41.79 billion
Rev. per Employee
$68,007
loading...
/zigman2/quotes/207508890/composite
US : U.S.: Nasdaq
$ 107.20
+0.33 +0.31%
Volume: 5.02M
March 2, 2021 4:00p
P/E Ratio
192.63
Dividend Yield
1.68%
Market Cap
$125.82 billion
Rev. per Employee
$67,371
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 28.22
+0.13 +0.46%
Volume: 35.72M
March 2, 2021 4:02p
P/E Ratio
N/A
Dividend Yield
7.37%
Market Cap
$200.33 billion
Rev. per Employee
$746,783
loading...
/zigman2/quotes/202877789/composite
US : U.S.: NYSE
$ 33.51
-0.18 -0.53%
Volume: 27.67M
March 2, 2021 4:02p
P/E Ratio
19.60
Dividend Yield
4.66%
Market Cap
$187.91 billion
Rev. per Employee
$533,860
loading...

Mark Hulbert is the founder of Hulbert Financial Digest in Chapel Hill, N.C. He has been tracking the advice of more than 160 financial newsletters since 1980. Follow him on Twitter @MktwHulbert.

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Mark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD...

Mark Hulbert is editor of the Hulbert Financial Digest, which since 1980 has been tracking the performance of hundreds of investment advisors. The HFD became a service of MarketWatch in April 2002. In addition to being a Senior Columnist for MarketWatch, Hulbert writes a monthly column for Barron’s.com and a column on investment strategies for the Journal of the American Association of Individual Investors. A frequent guest on television and radio shows, you may have seen Hulbert on CNBC, Wall Street Week, or ABC’s World News This Morning. Most recently, Dow Jones and MarketWatch launched a new weekly newsletter based on Hulbert's research, entitled Hulbert on Markets: What’s Working Now.

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