A collective love letter from the Kames Capital Equities Team.

It’s Valentine’s Day and what better way to share the love than talking about some of the most romantic stocks…

Hotel Chocolat
Audrey Ryan“Chocolate is up there as one of the most popular Valentine’s gifts and Hotel Chocolat is rapidly becoming the go to affordable luxury option in the market.Brand is central to Hotel Chocolat’s success and the company prides itself on originality and innovation. Ever-more tempting and delicious products are constantly being launched, like the Velvetiser – a machine that promises barista-grade hot chocolate (mmmmmm).

What’s more, you can feel less guilty about scoffing a whole box of chocolaty goodness thanks to their “more cocoa, less sugar” mantra – ideal in today’s increasingly health and diet conscious world.
These days, consumers also want products that are ethically sourced and this is another pillar of the brand. Through their ‘Engaged Ethics’ supply chain programme the company looks to work directly with cocoa farmers to guarantee a fair price for the fruits of their labour – an important step given that around 90% of the world’s cocoa is grown on small family farms.

The track record of success since IPO in 2016 points to a high quality management team with the right strategy for continued (and sustainable) growth. By selling through its own stores, online and through wholesale partners like Ocado, Amazon and QVC, it has a number of routes to market and with international expansion gathering pace too (new stores recently opened in New York and Tokyo), Hotel Chocolat is investing for growth, giving you more ways to grab that last minute box of chocolates (or Velvetiser) on your way home on the 14th. “

LVMH
Mark Peden“With over 70 luxury maisons to choose from, what company in the world can provide practically everything for the ultimately perfect Valentine’s experience? Try Bernard Arnault’s brand powerhouse LVMH and indulge yourself just a touch…

Aboard the Royal Val Lent yacht slip into your favourite Christian Dior gown and Emilio Pucci or Nicholas Kirkwood shoes, pick up your Louis Vuitton Neverfull bag and spray on a little L’Interdit par Givenchy. Be sure to cover any blemishes with Benefit Cosmetics and head down to the drawing room. Oh, and don’t forget the Chaumet tiara and that priceless Bulgari timepiece of course darling.

Once there, sample an unrivalled choice of champagnes from Dom Perignon, Moet & Chandon, Krug, Ruinart and Veuve Clicquot… amongst others (are there really any others?). After supper has been served and accompanied by a selection of the finest wines from Chateau d’Yquem, finish off with a wee dram of Ardbeg or Glenmorangie, or why not one of each? What more could anyone want? An even higher share price perhaps…?!”

Greggs
Douglas Scott“The way to a man’s heart is through his stomach” but this may not involve some Chile en nogado or Galantine. There are more frugal and simple ways to achieve this. Last year Greggs offered a candle-lit fine-dining experience, all for £15 per couple. Sadly due to the high demand the deal sold out within twenty minutes, leaving many an epicure disappointed. This year the problem in selective cities is what to order. Greggs are trialling home delivery, one can participate in the valentines experience through a Beef Chili bake (£1.50) and a Jammy Heart Biscuit (75p). If you still have room after that, you can buy twelve doughnuts for a fiver. Why dine out when you can feast in (and avoid any washing up)!
Diageo
Douglas Scott“What the lady wants for Valentine’s Day might not arrive. George Clooney and David Beckham are not to be found on the first aisle of many a struggling high street shop. Gin o’clock will pass by on the day without their arrival, but what about something different to taste that you can have on Valentine’s day? A bottle of Casamigos Tequila founded and favoured by the Hollywood heart-throb Clooney, or the Haig Club Scotch endorsed by David Beckham and specifically blended with the lady in mind? Both are produced by Diageo who have the successful strategy of focussing on higher margin, higher growth premium products. Diageo has just reported organic net sales growth of 7.5%, their shares have seen a bit of fizz as well up 22% in the past year.”
Ryanair
Allan Clarke“What better way to treat your Valentine than by taking them on a cheeky weekend away? With romantic destinations like Paris, Rome, Venice and Vienna all a short flight away it has to be a sure way of getting in to the good books with your loved one, right? Just think, as the pilot comes over the intercom and says “please relax and enjoy your flight” you can stare into each other’s eyes and look forward to that lovely hotel you’ve booked, the fancy restaurant reservation for a top-notch meal and when to surprise with the secret sparkly gift you’ve hidden away in your luggage. Mind you, that sounds like it’s going to be an expensive trip, so isn’t it wonderful that “Europe’s favourite airline” just happens to also be Europe’s cheapest airline – good job, Ryanair.

But what’s that? You’ve had to empty out your luggage (complete with hidden gift) in the middle of the terminal building to get it down to the required weight? And you’ve forgotten to pay for seats together on the flight so have ended up at opposite ends of the plane, somewhere between the stag and hen parties that have decided to have a singing competition with each other? Ah well, at least with Ryanair you know there’s a 90% chance your flight won’t be late(!) And you are aware that there’s still a 170km trip to get from “Paris Vatry” airport to, well, Paris to come too, right? Just think of that as an excellent opportunity to get to know your partner better, and maybe try out a few of your latest wisecrack jokes. Fabulous.”


Opinions and views from the Equities team at Kames Capital are not an investment recommendation, research or advice and should not be considered as such. Content discussing investment strategies and stocks is derived from and solely relates to the investment management activities of Kames Capital.

About the author

Audrey Ryan is an investment manager in the UK Equities team with responsibility for managing several funds. In addition, Audrey has analysis duties for the travel & leisure sector, and is a small-cap specialist. She joined us in 1997 from General Accident where she was a UK small companies portfolio manager. Audrey studied Accounting at Napier University, is a qualified chartered accountant and has an MSc in Investment Analysis. She has 24 years’ industry experience*.

 

About the author

Mark Peden is the architect of our global equity income strategy and has been the lead manager of the Kames Global Equity Income Strategy since its inception in 2011. European equities are his main area of research expertise where he has been analysing companies since joining the firm in 1992. Over his tenure Mark has held a number of positions and managed a range of both International and European equity funds. He graduated from the University of York and the University of California (Santa Barbara) with a BSc honours degree in Economics with Politics. He a CFA charterholder and is also an Associate member of the UK Society of Investment Professionals (ASIP). He has 26 years ’industry experience.*

About the author

Douglas Scott is an investment manager in the UK Equities team with responsibility for managing several equity income funds. In addition, Douglas has analysis duties for the tobacco, real estate, telecoms, beverages and oil services sectors. He joined us in 2003 from Investec where he was a stockbroker specialising in the telecoms sector and, prior to that, worked for TRW and Abbey National in their UK equity teams. Douglas has a 1st Class Honours degree in Aeronautical Engineering from the University of Glasgow and a Diploma in Actuarial Science from Heriot-Watt University. He has 22 years’ industry experience*.

About the author

Allan Clarke is an investment analyst in our Equities team and is responsible for generating investment ideas for our European and global equity funds. He joined us in 2015 from PricewaterhouseCoopers, where he was a Manager in the Valuations team that specialises in the valuation of private companies and other unlisted assets. He has 12 years’ industry experience*. Allan has a first class honours degree in Business Studies and Accountancy from the University of Edinburgh and is a Chartered Accountant.

*As at 30 November 2018.

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