Billionaire investment guru Warren Buffett has always had a soft spot for branded consumer goods businesses. A major reason for Buffett's fondness for these types of stocks is the "moat" which can be built with a strong brand.
With the exception of OrotonGroup Limited (ASX: ORL) the following five stocks have all managed to outperform the minus 3% return of the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the past 12 months, in some cases by an extraordinary amount. More importantly, given the appeal of each brand their future could be bright.
1. Coca Cola Amatil Ltd (ASX: CCL) – up around 5% in the past year
When it comes to branded consumer goods they don't really come any bigger than the globally recognised 'Coke'! As the Australian bottler of Coke and other branded beverages, Coca-Cola Amatil, certainly enjoys a moat around its business. While margins remain under pressure the brand strength remains intact.
2. Capilano Honey Ltd (ASX: CZZ) – up nearly 200%
Long-term investors will be feeling very sweet towards this buzzing honey producer thanks to the group's share price performance. With Capilano dominating the supermarket shelf space and expanding into niche products, the group's brand name should continue to strengthen.
3. Bellamy's Australia Ltd (ASX: BAL) – up 470%
The share price of this popular baby formula marketer has raced higher ever since listing on the ASX in mid-2014. Bellamy's brand appears to have captured significant appeal with parents and an increase in product lines could help grow customer capture and spend further.
4. Blackmores Limited (ASX: BKL) – up 434%
The vitamin giant is already a popular brand in Australia but importantly it is becoming increasingly popular in Asia too. As I noted here, the group is also making a strategic move into the infant formula market which will see it leverage its brand, experience and networks.
5. OrotonGroup – down 30%
The luxury goods company has been anything but a luxury to own for shareholders in the past few years. A significant cause of the group's under-performance hasn't been its namesake, the Oroton brand however, but rather its strategy of also licensing other upmarket labels. With the group finally focussed on maximising the potential of the Oroton brand minus the distraction of other licenses, things could continue to improve for the group.
