Sin stocks are popular with most investors. These are the types of companies that peddle alcohol, cigarettes and gambling to consumers – products and services that appeal to vices. It's popularity is easy to understand though. These companies tend to do well regardless of the economic environment. Whether the economy is expanding or contracting, people will still consume alcohol, smoke cigarettes and gamble.
For long-term investors, these are good stocks to own. They might be subject to short-term volatility, but generally have high free cash flow, operating margins and growth expectations. Alcohol in particular right now has a lot of potential for future growth.
The expanding global middle class – especially in BRIC economies – are becoming more demanding of what they want. Name-brand liquor and beer have proliferated in these countries as consumers have developed disposable income. Continue reading "Don't Worry About Bulls or Bears, This 'Sin' Stock Is A Buy Regardless"