The Paris Hilton Index
by Stockpickr Staff
Paris Hilton is out of jail!
It is amazing that a celebrity who is famous for just being a celebrity can get so much press coverage. Paris Hilton has had 14,886 news articles appear about her in Yahoo! News (YHOO) in just the last 30 days. Fred Fuld, who guest-writes at Stockpickr.com and also maintains the excellent blog, Stockerblog did some research into connections between Paris and various companies and developed a Paris Hilton Stock Index which shows some interesting returns, and some interesting investment possibilities. There are several companies that are associated with Paris Hilton in one way or another, and all these stocks can be found at the Paris Hilton Stock Portfolio.
What is amazing is that the Paris stocks outperformed the Dow Jones Industrial Average and the S&P 500 from May 1, shortly before she first went to court, until the day she first went to jail, rising over 10%. However, once her jail experience started, her stocks were down about 2.5%.
Paris has perfume lines, jewelry lines, cars she sponsors, food she does commercials for, books she writes, TV shows, gossip rags that live off of her, etc in her multimedia empire that draws her millions a year.
For instance, Parlux Fragrances (PARL) makes Paris Hilton perfumes and colognes. This is a very low cap stock and therefore should be considered very speculative.
One of the companies that has benefited from Paris publicity is Rupert Murdoch's News Corp. (NWS-A). Paris Hilton starred in The Simple Life television show which was produced by Fox Entertainment Group, which is a wholly owned subsidiary of News. In addition, News Corp. also owns The New York Post and TV Guide where Paris has also been getting a lot of exposure. Even without Paris, News Corp. is still a solid company with a price to earnings ratio of 20.8 and a favorable price earnings to growth ratio of 0.97.
Paris Hilton’s mugshot:
Speaking of celebrities, the News Corp. stock shows up in the Bill and Hillary Clinton Portfolio at Stockpickr, which lists the stocks held in and recently liquidated by the Bill and Hillary Rodham Clinton blind trust. The Clinton trust held a couple other stocks in the entertainment industry, Walt Disney Company (DIS) and General Electric (GE), which owns NBC.
News Corp. is also held by the Clipper Fund, which also owns 'famous' blue chip stocks such as Microsoft (MSFT), Coca Cola (KO) and American Express (AXP). The fund was up 15.3% last year and has outperformed the S&P 500 with an average annual return of 12.2%. NWS is also in the portfolio of Prince AL-Waleed.
Since the Larry King Live Show was able to successfully negotiate for the interview with Paris Hilton after getting out of jail, it brought up another interesting Paris stock. Larry King is on CNN, which is a division of the Turner Broadcasting System, which is owned by Time Warner (TWX). Time Warner has a very reasonable P/E ratio of 13.85 and a 1.7 PEG ratio. Additionally, Time Warner owns tmz.com, which is the gossip site who’s traffic has spiked considerably as a result of its coverage of Paris.
The stock is one of the significant holdings of Carl Icahn, the famous corporate raider. Icahn also has a few other show business stocks, including Lions Gate Entertainment (LGF) and Blockbuster (BBI).
In addition to being part of the Paris index, it is also part of Thestreet.com Internet Index, which also includes another Paris stock, Amazon.com, which created a Paris Hilton jewelry line.
Amazon had a huge run-up prior to May 1. Amazon now carries a P/E of 116 and a PEG of 2.75. The stock is owned by Legg Mason Value Trust managed by Bill Miller, the only mutual fund manager who has beaten the S&P 500 for 14 straight years. Another entertainment related stock that Miller owns is Barry Diller’s IAC/InterActiveCorp (IACI).
Investors are probably hopeful that Paris stays out of jail, so that 'her portfolio' keeps rising.
For the full list of the tens stocks she’s involved with check out the Paris Hilton portfolio .
