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Michelle Obama Has the Golden Touch
We all know the impact that celebrities have on businesses. One of the most obvious instances of this phenomenon comes from
the Oprah Winfrey Show. For example, when a title makes it into her book club, millions of loyal followers immediately take action,
and sales follow.These days, Michelle Obama is giving Oprah a run for her money. The First Lady is being closely watched by millions, and she
too has a loyal following. She also appears to have a fashion sense that resonates with consumers around the globe. We all saw
the number of stories and speculation about her gown during the inauguration.Apparently she loves J. Crew as she promoted the brand on late night television last year. More recently, she is buying J. Crew
for her kids, and I suspect her husband.What has been the impact of such adoration? In the midst of a deep recession, the endorsement from Michelle Obama has proved
to be invaluable—sales at J. Crew saw an immediate boost. In fact, shares of J. Crew (JCG)
are up more than 300% since late November of last year. Michelle Obama has the golden touch.With that in mind I thought it would be fun to venture an educated guess as to other companies that might benefit from the “Michelle
Obama effect.”Here are five stocks that may be poised to rally on the heels of an Obama endorsement…
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Stock #1: Talbots (TLB)
If ever a brand could use a boost it’s Talbots (TLB).
This conservative women’s clothing store has lacked the pizzazz to capture a larger market share. Michelle Obama wearing TLB
injects some much needed life into the brand.After the election, when it was known that Mrs. Obama wore TLB, shares bounced significantly. Previously, the stock was threatening
to broach the $1 mark. Today, you can buy shares for around $5.Perhaps a new generation of buyers will find TLB to be “cool conservative.” If the Obama effect has any legs, this stock could
see a tremendous boost.
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Stock #2: Chico’s (CHS)
Unlike Talbots, Chico’s (CHS) is already chic. It doesn’t need a boost from Mrs.
Obama, but an endorsement wouldn’t hurt either. Its White House/Black Market stores have seen explosive growth over the past decade
and seem to have the type of products that would look good in the real White House.In the immediate aftermath of the credit crisis, shares of CHS collapsed. They have since recovered and now trade above levels
reached last year but well off the highs of $30 reached before the recession began.If Mrs. Obama’s next great outfit comes from Chico’s, look for the stock to receive an immediate boost. $30 would not be out
of the question with an Obama seal of approval.
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Stock #3: Nordstrom (JWN)
We saw the first signs of the “Obama effect” with the hype of her inauguration gown. The designer of that stunning dress was
Jason Wu.I can imagine that many women looking to wear a stunning dress to their own special occasion might head to Nordstrom (JWN)—who
carries Wu’s collection. In this recession, department stores need all the help they can get, and selling a hot designer is a
great leg up on the competition.Even though shares of JWN have more than tripled in value since reaching a bottom last November, sales of Wu’s at Nordstrom,
could lead to more gains for shareholders.
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Stock #4: Whole Foods Market (WFMI)
Michelle Obama has made healthy eating a priority in her role as First Lady. Her emphasis on the earth-to-table approach to
dining emphasizes local and organic ingredients—and fits squarely with the mission of Whole Foods Market (WFMI).Obama’s White House garden is great top-of-mind stuff and demonstrates the value of a healthy lifestyle. It may not be for everyone,
but there will be enough followers that will think more and more about going organic. That means more shoppers at WFMI and a boost
to sales.I would buy this stock before the trend runs its course.
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Stock #5: Red Robin Gourmet Burgers (RRGB)
What about President Obama? Can following his tastes result in shareholder profits?
As Leader of the Free World, President Obama must be careful not to seem too commercial, so it’s unlikely that he will overtly
endorse any product. And so we have to dig a little deeper and learn from his actions.In a recent interview, Obama was seen at the burger shop, a favorite on the menu for the President. Will we see him at Red
Robin Gourmet Burger (RRGB)? His mere presence there would be an implied endorsement
and could send fans flocking to their own Red Robin Gourmet Burger restaurant.It may be a long shot, but the stock trades cheaply and a speculation like this may reap tremendous reward.
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