Investing, 'Mad Men' Style

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Mad Men Don Draper
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Besides entertaining viewers with top-notch acting, meticulously created era-appropriate settings, and amazing vintage fashions, AMC's "Mad Men" offers a full-color, multidimensional peek into the hottest businesses of the era.

Don Draper and company have hobnobbed with executives from Lucky Strike to Hilton Hotels to Dow Chemical, and pitched campaigns for everything from Clearasil to Cool Whip.

The fictionalized business-world flashbacks on "Mad Men" aren't just entertaining: From ketchup to cars to ladies' intimate apparel, they also provide real-world fodder for modern-day portfolios. Here's a look at a few great investment opportunities that are holding strong long after their talks with Don Draper's fictional advertising agency.

Heinz

The past few seasons of "Mad Men" have seen Pete Campbell and company lobbying for the affections of Heinz (HNZ) -- a ketchup, beans, and sauces company that's trying to differentiate itself from plain old ketchup.

Oh, what a difference a few decades can make. Now you pretty much can't go to a restaurant without seeing a bottle of Heinz ketchup at a table.

The company's financials are as delicious as its condiments, with revenue jumping from $10.7 billion in 2011 to $11.6 billion in 2012. It also has more than $1 billion in free cash flow and a fat dividend payout of 67 percent, which means there's still room for it to expand.

On top of everything, Heinz recently attracted superstar investor Warren Buffett. In February the Oracle of Omaha bought a huge stake in the business in partnership with 3G, a Brazilian private equity firm. Looks like things have turned out quite tastily for this ketchup company.

Maidenform

Peggy Olson -- a copywriter for Don Draper and every feminist's hero --gets one of her first cracks at advertising through writing a new pitch for Playtex. Playtex, meanwhile, only wants ads that look like those of popular intimate apparel brand Maidenform (MFB).

Several decades later, Maidenform is still going strong. However, Playtex -- which produces apparel as well as feminine- and baby-care products -- has disappeared from the public market, with its brand being licensed to other companies like Hanesbrands (HBI) to produce.

Still, in Maidenform we see a strong play for investors. The company offers an array of contemporary intimate apparel, and judging from some of its financial statements, this is still a business that knows what its audience wants.

Since 2008, annual revenue for the company has risen from $414 million to $600 million, a 45 percent increase. Maidenform also has a healthy $24 million in free cash flow. The company's total amount of assets ($436 million) more than doubles it total liabilities ($182 million). This is a brand that continues to stay stylish, even as times change.

General Motors

The latest big account Don Draper is trying to snag is that of Chevrolet, a brand owned by General Motors (GM).

Since it was founded in 1908, this company has stayed in the limelight as an eponymous American automobile icon. But, like the rest of the industry, it has been through a few close calls and several fender benders. The company had been part of the Dow Jones Industrial Average since 1925, but after the economic hardships of 2009, it was dropped like a heavy sack of car parts.

By November 2010, however, GM raised $20.1 billion and unleashed the biggest IPO in history at that time. But the obstacles weren't cleared yet. In July 2012, GM saw its stock reach an all-time low of $19.36, after a 6 percent decrease in overall sales. The company has since rebounded, however, and its price has risen a triumphant 63 percent.

During the past quarter, the U.S. auto industry enjoyed an overall gain in sales of 8.5 percent, and GM was one of many companies that benefited from the improvement. Its annual sales have risen 1 percent since last year, and if that sounds like a small number, look at it this way: It raked in $152.2 billion.

The Mad-ness of It All

We haven't heard the last of it from Don Draper, and fans can only speculate how his story, and that of Sterling Cooper Draper Pryce, will end. But we do know which companies survived the whiz-bang pace of the 1960s. And investors can use that knowledge to give their portfolios a bit of "Mad Men" pizzazz.

Motley Fool contributor Caroline Bennett has no position in any stocks mentioned. The Motley Fool recommends General Motors and H.J. Heinz. Try any of our newsletter services free for 30 days.

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An Iron Throne for Your Golden Years: Our 'Game of Thrones' Stock Picks
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Investing, 'Mad Men' Style
Stock: Goldman Sachs (GS)
As the Master of Coin on the Small Council in King's Landing, Petyr is in control of the kingdom's finances. And while the ruling Lannister family has a wealth of gold, the kingdom's expenses are many. So it's no surprise that Petyr would prefer investing in a large investment banking and securities company such as Goldman Sachs. Not only does Goldman Sachs profit from various financial services, but the company seems to always be profitable regardless of what happens in the stock market, housing market, or broader economy.
Stock: Zynga (ZNGA)
Even a child ruling a kingdom needs to blow off steam once in a while. That makes Zynga, a company focused on building social and casual games, the perfect pick for Joffrey Baratheon. Zynga also watched many of its executives leave the company and its stock price plummet, similar to the situation that Joffrey faces in King's Landing as the kingdom unravels. Yet Zynga's stock structure provides its CEO, Mark Pincus, 70 votes per share. That means that as of the end of 2012, Zynga's CEO owned 59 percent of the total voting power. Take that, mere commoner! It's not bad to be the head of Zynga... unless your stock's awful performance costs you a spot on the Forbes billionaire list.
Stock: Yahoo! (YHOO)
The Queen Regent and mother of Joffrey Baratheon, Cersei Lannister would admire a bold female CEO such as Marissa Mayer of Yahoo! Joining Yahoo! less than a year ago, Mayer is determined to turn around the struggling company, and is focused on building Yahoo!'s employees and changing the internal culture. Bold leadership is something that Cersei would identify with, although the two have quite different perspectives on how to get results.
Stock: LinkedIn (LNKD)
Tyrion Lannister is often underestimated by those around him given his size and appearance. But time and again his intellect is what wins the day. Tyrion understands the value of building an intelligence network throughout King's Landing, which is why he would invest in LinkedIn. In the social media realm, LinkedIn is also oftentimes overlooked due to Facebook's much larger user base -- over 1 billion monthly active users, compared to its own roughly 200 million total registered users (not monthly active users). Although Facebook towers over LinkedIn, LinkedIn's revenue per user was 20 times that of Facebook as of this summer.
Stock: Apple (AAPL)
Having lost his father, Eddard Stark, Robb is trying to lead his father's men to the best of his ability. While he lacks experience on the battlefield, his father taught him many lessons in leadership and duty. That's why Apple would catch Robb's interest as an investor. When Tim Cook became CEO of Apple, outsiders wondered whether he was capable of leading the giant tech company. While the company has had its challenges since then (e.g., Apple Maps), its position as one of the most influential tech companies has not been usurped by any of its rivals.
Stock: Caterpillar (CAT)
As a steward of the Night's Watch, Jon Snow must protect the Wall. He knows that winter is coming -- and the Wall might need some fortification. That would make Caterpillar, which focuses on construction and building infrastructure, top on his investing list. Since some of Caterpillar's products are used for snow removal, Jon Snow would also be demonstrating a Peter Lynch mentality of buying what you know.
Stock: Garmin (GRMN)
Living in exile hasn't been easy for Daenerys, as she's never found a true place to call her own. But as she establishes her identity as the Mother of Dragons, she's determined to return to Westeros. As someone seeking direction and a way home, Daenerys would likely buy shares of Garmin for her investing portfolio. The GPS technology company creates navigation products for every mode of transportation, including air and sea. And if she's ever to return to Westeros, one of Garmin's marine products would sure be useful.
Stock: Berkshire Hathaway (BRK-A; BRK-B)
As a eunuch, Varys demonstrates his power through a (spider)web of contacts that feed him information. He uses information to gain a personal advantage, creating an insurance policy of sorts. Therefore Varys would be a fan of the insurance model and invest in Berkshire Hathaway. Berkshire Hathaway is a large conglomerate holding company, owning stakes in or even whole companies across many different industries. Similarly, beyond his network of information-sharing contacts, Varys seems to have a hand in structuring deals or alliances across the kingdom.
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