Baseball is all about numbers, just like the stock market. Wall Street got all excited when the Dow Jones Industrial Average broke 14,000. Any day now Barry Bonds will be breaking the career home-run record set by Hank Aaron of 755. He only needs three more to reach 756.
Barry Bonds' last few years have been surrounded by controversy, from mistresses to steroids to anti-social behavior, as he has chased his destiny in pursuit of the home-run record. I will not dwell on any of these issues here as they have all been discussed in far greater detail than need be in every form of media.
I just got back from lunch at O'Brien's Pub where the subject came up (how could it not) and I was thinking about how I would end the story in grandeur if I was writing it. More importantly Hank and I (the bartender, not Aaron) were discussing what Bonds could do to create the perfect ending to this story and his career. Then it came to me -- Bonds should hit No. 755, shake hands with the umpire, his teammates and manager, wave to the fans, and simply walk off the field -- The Ultimate Walk-off Home Run.
Leave the field and baseball with the record a tie. If he ended his baseball career in this way he will have crafted one of the top sports stories of all time. Furthermore, Henry Aaron, who is not likely to be present when the record is broken or even shake Bonds' hand, will be honored and the two men will represent baseball together as the joint record holders, side by side in every publication and many Major League Baseball events. Of course, this ending is just a figment of my imagination, it does not seem to be in Barry Bonds' persona to even think of this storybook ending.
And speaking about home runs, Willie, the owner of O'Brien's, was telling me about his nearly completed pub in Shreveport, Louisiana, and his plans to expand to other locations and create a franchise with some branding power. One of the oddities of my life is that I do not drink, yet I find this pub a lunchtime refuge from life's many pressures. I also have been thinking about several relevant companies that deal in alcoholic beverages. One in particular that has been on my watch list for quite some time and may be worth a closer look now is, Diageo plc (NYSE: DEO). It has many intriguing metrics to consider.
Diageo closed today at $84.07, a couple bucks off its 52-week high. It is paying a dividend yield of 2.84%, that is higher than average but sports a P/E of around 14. That is not only lower than the market average but lower than the industry average, according to AOL Money & Finance. While I think the price-to-book is too high, over 6, it has a staggering return-on-equity of 42% and a profit margin of 27%. No one knows when the US or world economy might falter, but DEO should do well either way, the dividend offers some cushion and the branding power should do well in the growing foreign markets. It could be one of those value plays that is also a growth story. So Bonds is up, O'Briens is up and I think Diageo is heading up. Two out of three will probably continue to do so for a long time.
Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.
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