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Invest Like Kim Kardashian

David Bartosiak

Love her or hate her, Kim Kardashian is plastered all over the internet and social media. Her latest stunt, putting her photoshopped posterior on the pages of Paper magazine tried to break the internet. Good news for Al Gore and the rest of us, the internet is doing just fine. For someone who started off as Paris Hilton’s personal assistant, she has risen from the ranks of obscurity to one of the most recognizable people on Earth.

I’m going to stop shy of calling it the embodiment of the American dream. There were a few eyebrow-raising moments along the way. There was the infamous tape with Ray J and a 72 day marriage to Kris Humphries. But the latest incarnation of Kim K has her as a mother and half of the worldwide super power couple with Kanye West. Lately Kim has been all about business and all about making money. Then again, perhaps it has been that way all along.

Along her meteoric rise, Kim has endorsed several brands. She has her own perfume, her own app and a line of clothing available at department stores. Here I offer up a few suggestions on how you can use the Zacks Rank to invest like Kim Kardashian.


Allergan (AGN)

If you want to keep yourself looking great in front of the camera, you may have to do something about those wrinkles. Personally, I wear wrinkles like a badge of honor. But they don’t put this mug on the cover of magazines. Nobody knows how to iron out those wrinkles better than Botox-maker Allergan.

In the news today due to a merger with Actavis (ACT) that values Allergan at $66 billion, Allergan is a Zacks Rank #2 (Buy). Over the last 60 days, ten analysts have revised earnings estimates to the upside for next year. The bullish trend in estimates has helped pushed consensus up from $8.26 to $8.57. That represents huge growth based on current year estimates of $6.29. With the $1.5 billion in synergies estimated from the merger, look for the new company to do very well.

Sketchers (SKX)

Remember the Sketchers Shape-Ups? These shoes were curved at the bottom and claimed to help tone your bottom. Eager to take advantage of her fame, Sketchers and Kardashian partnered up to promote this product line. Unfortunately, much like Kim’s two previous marriages the relationship didn’t last. Consumers ended up injuring themselves with the shoes and the Federal Trade Commission ended up sending over 500,000 refund checks to purchasers as part of a $40 million settlement.

While that product line didn’t work out, Sketchers has been humming right along and is currently a Zacks Rank #1 (Strong Buy). Two analysts have revised their earnings estimates for the current year and next year, over the last 30 days. The revisions have pushed up consensus from $2.53 to $2.72 for the current year. Also, four consecutive earnings surprises to the upside average over 50% have been very bullish for the stock price. Sketchers has risen from below $27 to the $57 level it trades at today.

Zeltiq Aesthetics (ZLTQ)

Let’s say you have been doing your side-bends and sit-ups but that stubborn baby fat is still hanging on. There are rumors that Kim had a little work done after giving birth to her daughter. Perhaps she went for a procedure that’s a little less obtrusive like Zeltiq Aesthetic’s  CoolSculpting. This non-surgical fat treatment freezes and eliminates unwanted fat cells. In the weeks that fallow treatment, the frozen fat cells die and are naturally eliminated from the body.

This procedure has helped Zeltiq have huge growth numbers and the bullish trend among analysts has it as a Zacks Rank #2 (Buy). Over the last 30 days, four analysts have revised their earnings estimates for the current year. After expecting a loss of 20 cents, analysts are now looking for only a 4 cent loss. This may still be on the conservative side. Over the last two quarters Zeltiq has beat estimates by an average of 21 cents.


Bottom Line

Kim Kardashian isn’t going to fade into obscurity anytime soon. She will pop up on your Twitter, your Facebook trending, and in your emails for years to come. While you may not be able to be as famous as her, you can try to profit from her fame. 

ALLERGAN INC (AGN): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
ZELTIQ AESTHETC (ZLTQ): Free Stock Analysis Report

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