Consumer DM Stocks Make a Comeback
CONSUMER DM stocks registered significant gains throughout the winter. Improvements in previous quarters were led primarily by electronic marketers, but in the three months ended Feb. 26 both consumer cataloger and cataloger/retailer issues fared better.
The 52 consumer DM stocks in Gruppo, Levey & Co.’s Direct Marketing Index rose an average of 27% for the quarter, outpacing the Standard & Poor’s 500, up 6.4% during that time. Cataloger and retailer issues were up 31% and 52%.
Mergers and acquisitions and e-commerce spurred stock performance.
During the quarter and trailing 12-month period, Fingerhut stock soared 121% and 211%, respectively, as the cataloger agreed to be bought by Federated Department Stores.
Even outside the electronic marketing sector, which racked up a quarterly average price per share increase of 22%, e-commerce initiatives reaped benefits for old-line and newer consumer DMers alike.
Playboy Enterprises’ and The Reader’s Digest Association’s stocks rose more than 40% in the quarter owing to new or improved Internet efforts. SkyMall, Delia’s and Shop at Home’s issues did well due to profitable Web strategies.