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Invest for the Forthcoming Zombie Apocalypse



February 02, 2012 – Comments (0) | RELATED TICKERS: F , ZIP.DL2 , HOG

Location: MarkReeth's CAPS Blog

Author: MarkReeth

The zombies are coming.  You know it, I know it, and the Mayans knew it.  But before they get here, I'd like to offer some friendly investing advice that might also save your life someday.

According to the US Census Bureau, in 2005 296.4 million people lived in the United States—246.5 million (83 percent) in metro areas and 30.4 million (10 percent) in micro areas (i.e. suburbs).  The remaining 19.5 million people (7 percent) lived in rural areas.  In short 93% of US citizens lived in metropolitan and suburban areas, which means there’s a good chance that most of you reading this live in a city.  You poor bastards.   

When the dead rise to snack upon the living they will follow the same logic that’s made all-you-can-eat buffets so popular; go to where the food is.  Specifically 93% of the food.  That’s why you’ll need to flee your urban home, and you can’t do it on foot; I mean sure, the average human is much faster than the average zombie, but a zombie doesn’t have to sleep or stop and rest every now and then.  Thus to flee properly, you’ll need a vehicle of some sort.  Here I present to you some options for getting out of Dodge in anything but a Dodge.  First up is Ford. 

Fording the River of Zombies 

Ford reported earnings today (Friday) and in case you missed it, their fourth quarter net income rose to $13.6 billion thanks to some tax accounting loopholes (as artfully explained in John Rosevear’s article).  Once the earnings had been adjusted for this loophole it turned out that Ford’s actual profit was $1.1 billion, down from $1.3 billion last year, but that revenue for the fourth quarter rose to $34.6 billion.  Pretty mixed results overall, and definitely not what investors were hoping for, but I’m willing to bet my life and the lives of my loved ones Ford will recover from this quickly and beat expectations for the rest of this year.  Ford has become a company that makes luxury cars at affordable rates, so all you city dwellers trying to flee the undead hordes in style won’t have to worry about leaving your limos and town cars behind.  The big F has managed to post big sales increases (11%) over the last three years, all while leaving bogged-down competitors (I’m looking at your Volt, GM) in the dust.  And we all know what happens when you get bogged down while the zombies are attacking. 

Bottom line: When the zombies come for you and your family, make like the Ford’s reasonably priced hybrid SUV and Escape.  Buy Ford.

Zipping Away From Zombies

But what happens if, as you and your loved ones are running to your car and away from the moaning masses of ghouls shambling towards you, you are struck by a terrible realization; you don’t own a car.  Of course you don’t own a car, you modern urban dweller; who would want to put up with high gas and insurance prices, taxes, fees and maintenance?  Heck, it might be easier to deal with the undead than your insurance claims agent.  But now all that matters is getting away, and luckily for you there’s a solution: Zipcar

Despite the fact that Zipcar’s stock price is at less than half of what it IPO’d at in April, ZIP has reported a 3rd quarter profit of 2 cents per share.  The company also just declared that they’ll announce 4th quarter and full year earnings on February 14th, which will make or break the stock’s recent tentative moves upward.  In all likelihood the company won’t be profitable in 2011 or 2012.  But, like your high school girlfriend who is now probably a zombie, what Zipcar lacks in substance it makes up for in style. 

Zipcar is at the head of a quickly growing group of car sharing companies thanks to some of its excellent distribution tactics, specifically the company’s focus on universities and young adults aged 18-34.  While Zipcar has done well in its four major markets (Boston, New York City, Washington DC and San Francisco) it is still expanding to other markets in the US and Europe.  If ZIP can do this successfully, while keeping brand loyalty in already matured markets and paying down its debt, then there’s a bright future for Zipcar.  In spite of all the zombies. 

Bottom line: Zipcar provides “wheels when you want them” and trust me, when the dead rise you’ll definitely want those wheels.  Buy Zipcar.

How to Flee Zombies Like a Manly Man

Now let’s just say for a moment that you aren’t a family man; you’re a renegade, a cowboy, a one man wrecking crew.  The only loved ones you have are a leather jacket and a sawed-off shotgun.  This whole zombie apocalypse thing isn’t a downer for you; on the contrary, it’s an opportunity to make a splashy exit from your zombie-ridden urban abode.  And if you need to make a splashy exit from a zombie-ridden urban abode, you need Harley Davidson and Polaris. 

In their earnings announcement this past Tuesday, Harley Davidson posted gains across the board with a net income of $599.1 million for 2011, an increase of $1.22 per share, and revenue increasing to $4.66 billion.  HOG also stated that the company expects to ship nearly a quarter of a million bikes this year, which means you might still be able to get your hands on one before the inevitable Mad Max-esque biker gangs do.  Meanwhile on Wednesday Polaris also beat analyst expectations with year over year profits jumping 17%, results which really shouldn’t surprise anyone; if you read Max Brooks’ seminal Zombie Survival Guide you’ll see that the motorcycle is “definitely the best choice for fleeing a [zombie] infested area” (pg 106).  It’s clear that people are simply getting a jump start on the apocalypse and purchasing their best means of escape now while they have the chance. 

Bottom Line: Would you rather be stuck in a panicked traffic jam leading away from your zombified city, or be weaving through it on the back of your roaring hog with the wind blowing through your mutton chops?  The choice is pretty obvious.  Buy Harley Davidson and Polaris.

The End???

Congratulations, you’ve successfully evaded the moth-like zombies being drawn to the flame that was your city.  That’s actually not a metaphor either; your city is burning down.  Luckily for you you’ve paid attention throughout this article and bought F, ZIP, HOG and PII.  Of course, your fight isn’t over; once the zombies are done in the city they’ll begin searching for new sources of food and may eventually find you.  But don’t worry; we’ll discuss what to do about that in next week’s article.

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