Jarden, Under Armour, PepsiCo, Hibbet Sports, Sirius: Five Big Hits with the Boys of Summer

Jarden Corp. (JAH)
The pitch: The company is an aggregation of many other companies and its broad line of products encompasses the likes of Coleman camping equipment to Bicycle playing cards to use around the campfire. More importantly, Jarden owns Rawlings, the manufacturer of baseballs, gloves, and helmets. In addition, it is the the official supplier to Major League Baseball (since 1977) providing the equipment for all the MLB players.

Kiplinger thinks that the company is going to break through in 2010 with a stronger balance sheet and new products after drifting amid the sluggish economy and currently sporting a P/E ratio or 12.0

My take: Baseball equipment may be in higher demand during the season but it will not lead to greater year round glory. The P/E of 12 is forward looking, the current trailing P/E is 22.32, hardly a bargain. Forward P/E's are not facts, they are a guess. However, I would be willing to split the difference and use 17.11, which is not so exciting. JAH does have a low P/CF of 6.88, very low P/S of 0.51 and a fair P/B of 1.58. The problem is that it also has a low profit margin of 2.5% and a single digit ROE of 8.9. It pays less than a 1% dividend yield and is carrying way too much debt to think this might increase. If I was creating a broad based portfolio to follow along with the improvements in the economy JAH might be included, but since I expect to be buying cheap stocks that have to stand on their own I'm letting this pitch sail by. It closed at $33.93.

Under Armour (UA)
The pitch: This story is much simpler. As the leading maker of under garments that famously wick away moisture, a favorite among athletes, it is poised to triple its earnings as it expands its product line, its number of sales points and broadens its exposure on the West Coast. They do not claim it is cheap buy the numbers, but think that the pace of growth will overtake this fact.

My Take: I like the story much better but nothing about this company is cheap. I won't go through the numbers because they are not noteworthy and Kiplinger is not selling this notion. The P/E is too high and the margins are too low but the PEG ratio is the important metric and that is intriguing at 1.39. A price-to-earnings-to-growth ratio of 1.0 is the target for a steal. On the other hand, anything less than 1.5 is very good and if that is what it is today before the economy rebounds in earnest than Under Armour is one to watch. It closed at $31.55.

PepsiCo (PEP)
The pitch: Pepsi makes tons of popular products that also are MLB sponsors like Gatorade, and Frito Lay and, of course, its mainstay Pepsi-Cola. The company pays dependable dividends year in and year out, recently increasing them by 7% and lifting the yield to 2.9%. They expect the company to grow 11% in the coming year with a high level of certainty.

My Take: Boring, boring, boring -- the fans will be doing the seventh inning stretch by the third inning. There is no question that PEP is a great company to own and particularly in a shaky market. If you have idle cash sitting in certificates of deposit I think it would be a good idea to thaw some out and invest it here instead. The problem is that the metrics indicate that you would be buying a stock that can probably trace an index fund. It does have a huge ROE at 40 and very nice profit margins at 13.75%, but it also has a P/B of 5.69. I would love to own this stock, but only if I could get it cheap, like "my pal Warren". That is not going to happen, so I'm passing on this one too. It closed at $65.99.

Hibbett Sports (HIBB)
The pitch: The company has 760 sporting goods stores in 24 states finding a niche in small towns where they do not compete with the larger chains. That was Wal-Marts (WMT) strategy many when they started many years ago -- and it worked. They are continuing to expand so it is a growth story, and there certainly are many more small towns in many more states so their growth has lot's of potential.

My take: This is the one to buy. I like the story and using a Wal-Mart approach is great, and the analogy is true in more ways then one. I'm going to ignore the P/E of 20 because I want to shout out that HIBB has a very low PEG of 1.15, almost no debt, a 15% growth rate even in a lousy economy, a low P/S of 1.08, and sports a double digit ROE, ROA and ROIC. I see a lot of upside to this stock with minimal risk. I also think that given HIBB's niche and the fact that the company is only valued at $740 million, it is a buy out target for sure. It could be swallowed in one bite. I would be greatly surprised it if is not, unless there are some ghosts in the closet. I will be exploring this one further. It closed at $25.67.

Sirius Satellite Radio (SIRI)
The pitch: The merger of Sirius with XM made it the only game in town for satellite radio. With the improvement in car sales where it offers free initial start-up, and the fact that it channels all the baseball games, it has some potential.

My take: I admonished readers to stay away when it was $6.00 and when it was $4.00 and when it was $3.00 per share and I am suggesting you step out of the batters box now before you get hit by a fastball. If you buy a company that has not made a profit in sixteen years, may be de-listed from the stock exchange, and has an ROE of negative 2500 and cannot demonstrate a path to glory, then perhaps you have already been hit in the head by a pitch. The one and only thing this company has going for it in my opinion is John Malone, the hugely successful media mogul that has a major stake in the SIRI. This is a high risk venture and with so many other better bargains out there I would just put down the bat and go to the showers to cool off. It closed yesterday at 95 cents.

My batting order is clear; Hibbertt Sports is definitely the lead-off hitter and is most likely to get on base, maybe steal a few and make it home; Under Armour is worth putting on your watch list and for the conservative investor Pepsi can do you no harm and will pay you to be in the line-up; Jarden stays in the minors and probably double-A not, triple-A league; I would talk-up Sirius as the come back player of the year in order to make a fast trade for a second round draft pick, but there is no chance it's on the team when the regular season starts.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: He does not own any of the stocks mentioned in this story but is active in the stock market.