5 Companies That Play Like Tim Tebow
His accuracy may be spotty and his delivery unconventional, but there are certain intangibles that have helped him overcome his own shortcomings as a passer to make sure that his team is on the winning end of the scoreboard at the end of the game.
There are plenty of gritty winners on Wall Street, making the most of their niche limitations to somehow come out on top. Let's go over a few of the market's surprising companies that, like Tim Tebow, are not only surviving but actually thriving in challenging circumstances.
1. Shutterfly (SFLY)
Photofinishing is dead. You see it in pioneer Eastman Kodak (EK) on the brink of bankruptcy. Virtual photo-sharing is dead outside of Facebook. You see it in Webshots being passed around like a hot potato on this sudsy end of the dot-com bubble.
Well, here comes Shutterfly to make sense of it all with an e-commerce business that combines seemingly fatal shutterbug specialties into a fast-growing solution for customized coffee table photo books, holiday greeting cards, and even the more conventional print processing.
Revenue soared 56% in its latest quarter. Acquiring Tiny Prints helped pad those results, but Shutterfly's organic business is still growing at a healthy double-digit clip. Some argue that selling photo-customized products by mail is a cutthroat business or one that will grow extinct as home-based printing solutions evolve, but Shutterfly customers are a loyal lot. A healthy 77% of its orders in its latest quarter came from repeat customers.
2. NVR (NVR)
They say the homebuilding industry is toast. Folks are flocking to smaller digs in walkable urban neighborhoods, leaving the cookie-cutter McMansions being developed out in the suburbs collecting cobwebs.
Well, don't tell NVR that there isn't money to be made in building homesteads. The company's conservative approach and healthy balance sheet have resulted in a company that has been profitable during all but a single quarter during the housing market's collapse.
In an industry of "as is" fixer-uppers, NVR is in move-in condition.
3. Jamba (JMBA)
The parent company behind the Jamba Juice smoothie chain should be in trouble. McDonald's (MCD) began serving up cheap smoothies with drive-thru convenience last year and Starbucks (SBUX) has been at it for a couple of years now. Moving $5 blended fruit drinks with supplemental wellness boosts sounds like a bad value proposition in this competitive environment.
However, Jamba has posted four consecutive quarters of positive store-level sales growth, indicating that the McCafe smoothie introduction last year has actually helped business by educating the consumer. Jamba is also coming off back-to-back profitable quarters for the first time in years, proving that intensified competition hasn't jammed margins into a blender.
4. Papa John's (PZZA)
Selling pizza isn't easy these days. Rivals are promoting $5 pies. Health concerns against the greasy globs of cheese-topped dough are mounting. Supermarket freezer aisles find companies now bundling pizzas with chicken wings and chocolate chip cookies. Really.
Can Papa John's really succeed in this competitive pricing climate while staying true to its "better ingredients" pledge? Well, it's happening. Papa John's is one of the few eatery stocks to recently hit new highs. Analysts don't see Papa John's getting skimpy on the toppings or the bottom line. Wall Street feels that the pizza delivery specialist will grow its earnings by 19% this year and 17% next year.
5. Take-Two Interactive (TTWO)
The video game industry has been in a slump for nearly three years now. Die-hard gamers are still buying blockbusters, but they're playing single titles longer because of rich Web-tethered multiplayer action. The end result is softer overall sales, and casual gamers are now getting by with cheap apps and Facebook diversions.
Along comes Take-Two, a renegade developer known for pushing the envelope with games that teens love but parents dread.
The past hasn't really been spectacular for Take-Two, but the future promises to be more exciting. The company recently put out a trailer for Grand Theft Auto V. There is no firm release date for the highly anticipated title, but analysts see good things once the game hits the market. The pros are targeting revenue to surge 63% next fiscal year. The $2.43 a share that they're expecting in profitability prices the shares at less than six times forward earnings.
It's a good place to be. Even if the industry doesn't bounce back, Take-Two's promising near-term performance makes it a juicy buyout candidate.
So there you have it. These five stocks are making the best of their limited surroundings to deliver resilient performances. Tebow would be proud.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Jamba. The Motley Fool owns shares of Take-Two Interactive Software and Papa John's International. Motley Fool newsletter services have recommended buying shares of Take-Two Interactive Software and McDonald's.