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Would you rather invest in Campbell soup or Snapchat?

bko 12y ago
Clorox stock price 5 years ago: ~65 Clorox stock price today: ~108 Annual return: 10.7% Campbell stock price 5 years ago: ~35 Campbell stock price today: ~45 Annual return: 5.15% I get it, soup isn't sexy. Doesn't mean its not a good investment. Personally, I don't claim to have a preference for one or the other. Investment is more about risk profile than blind speculation.
- adventured 12y ago
  Clorox is also paying a 2.7% dividend. Campbell is 2.8%. Would be reasonable to bump those five year annual returns up to perhaps ~13% and ~7.5% (let's assume the dividend was lower five years ago).
discardorama 12y ago
Chlorox is the slow-and-steady type. SnapChat is the hare, to Chlorox's tortoise. The chances that Chlorox or Campbell will still be around in 10 years? Very high. Snapchat? Not so much.
tortilla 12y ago
I would invest in Campbell soup all day long. And I would gamble on Snapchat.
l33tfr4gg3r 12y ago
On the other hand, I personally think the chances that Snapchat (or its technology) will be acquired down the road are a lot higher than either Campbell or Chlorox.
- tghw 12y ago
  Acquisition isn't necessarily a good thing for normal investors.
- onion2k 12y ago
  I'm guessing you think that because you didn't experience the dotcom era first hand. Companies that have raised huge sums of money can go under. It's not happened recently but when it does it'll be horrible to watch. I'm not suggesting that we're in a bubble either - the fact is that companies die for a bewildering variety of reasons, and it is inevitable that one or more of the unicorns will die eventually.
- kens 12y ago
  Well, Clorox was acquired by Procter & Gamble in 1957 and then divested. Campbell Soup in the UK was acquired in 2008. So acquisition odds are higher than you'd think. You may think that food companies are boring, but there are a lot more acquisitions, spinoffs, and mergers of food companies than you'd think. Take a look at http://en.wikipedia.org/wiki/List_of_ConAgra_brands http://en.wikipedia.org/wiki/List_of_ConAgra_brands and consider that there are multiple acquisitions behind most of these. Kraft has gone through too many mergers, acquisitions, and takeovers to even try to explain. http://en.wikipedia.org/wiki/Kraft_Foods http://en.wikipedia.org/wiki/Kraft_Foods Anyway, my point is that it's not just the computer industry where acquisitions are happening for billions of dollars.
foobarqux 12y ago
Depends on the price. One would rather own a cheap Clorox than an expensive Snapchat.
dd36 12y ago
Depends on the valuation. If much of the upside is already baked into Snapchat then there's a lot of downside risk (hence the downside protection that these institutional investors are demanding). I wouldn't touch Snapchat at that valuation with anything more than spec funds. I certainly wouldn't view equity comp as valuable.
kyllo 12y ago
I'd pick Campbell's, that 2.77% dividend yield is nothing to sneeze at when interest rates are this low.

bko 12y ago

Clorox stock price 5 years ago: ~65 Clorox stock price today: ~108 Annual return: 10.7% Campbell stock price 5 years ago: ~35 Campbell stock price today: ~45 Annual return: 5.15% I get it, soup isn't sexy. Doesn't mean its not a good investment. Personally, I don't claim to have a preference for one or the other. Investment is more about risk profile than blind speculation.

adventured 12y ago
Clorox is also paying a 2.7% dividend. Campbell is 2.8%. Would be reasonable to bump those five year annual returns up to perhaps ~13% and ~7.5% (let's assume the dividend was lower five years ago).

discardorama 12y ago

Chlorox is the slow-and-steady type. SnapChat is the hare, to Chlorox's tortoise. The chances that Chlorox or Campbell will still be around in 10 years? Very high. Snapchat? Not so much.

tortilla 12y ago

I would invest in Campbell soup all day long. And I would gamble on Snapchat.

l33tfr4gg3r 12y ago

On the other hand, I personally think the chances that Snapchat (or its technology) will be acquired down the road are a lot higher than either Campbell or Chlorox.

tghw 12y ago
Acquisition isn't necessarily a good thing for normal investors.
onion2k 12y ago
I'm guessing you think that because you didn't experience the dotcom era first hand. Companies that have raised huge sums of money can go under. It's not happened recently but when it does it'll be horrible to watch. I'm not suggesting that we're in a bubble either - the fact is that companies die for a bewildering variety of reasons, and it is inevitable that one or more of the unicorns will die eventually.
kens 12y ago
Well, Clorox was acquired by Procter & Gamble in 1957 and then divested. Campbell Soup in the UK was acquired in 2008. So acquisition odds are higher than you'd think. You may think that food companies are boring, but there are a lot more acquisitions, spinoffs, and mergers of food companies than you'd think. Take a look at http://en.wikipedia.org/wiki/List_of_ConAgra_brands http://en.wikipedia.org/wiki/List_of_ConAgra_brands and consider that there are multiple acquisitions behind most of these. Kraft has gone through too many mergers, acquisitions, and takeovers to even try to explain. http://en.wikipedia.org/wiki/Kraft_Foods http://en.wikipedia.org/wiki/Kraft_Foods Anyway, my point is that it's not just the computer industry where acquisitions are happening for billions of dollars.

foobarqux 12y ago

Depends on the price. One would rather own a cheap Clorox than an expensive Snapchat.

dd36 12y ago

Depends on the valuation. If much of the upside is already baked into Snapchat then there's a lot of downside risk (hence the downside protection that these institutional investors are demanding). I wouldn't touch Snapchat at that valuation with anything more than spec funds. I certainly wouldn't view equity comp as valuable.

kyllo 12y ago

I'd pick Campbell's, that 2.77% dividend yield is nothing to sneeze at when interest rates are this low.