Jessica Simpson (and her alleged weight issue) is everywhere: magazine, tabloids, blogs. Even President Obama has been roped into the discussion.
But let's not forget what landed this singer-actress on the front pages in the first place. The uber-successful star has won three Teen Choice Awards and a People's Choice Award, and has three gold and two multiplatinum albums.
Stockpickr has started tracking the publicly traded companies connected to Simpson in the Jessica Simpson Stock Index. Her index is down only 5.4% year-to-date, vs. the Dow Jones Industrial Average, which dropped 8%.
Columbia Records, a division of Sony (SNE), was Simpson's first label, producing Sweet Kisses, her debut album. Irresistible was released in 2001 and became one of the biggest hits of her singing career, topping out at No. 15 on the Hot 100. Rejoyce: The Christmas Album was also released through Columbia Records. The movie Blonde Ambition,i n which Simpson had a starring role, was released through Screen Gems, a division of Sony Pictures.
Sony is one of the major entertainment holding companies suffering during this recession. The company has a price-to-earnings ratio of 20, which is a bit on the high side, and pays a yield of 1.9%, well-covered by its operating cash flow of $7.7 billion. Although it has $12 billion in debt, it has $5.7 billion in cash.
Sony is owned by the Vanguard PrimeCap Core Fund, a long-term capital appreciation fund managed by Joel Fried. The fund ranks in the top 5% of all funds in its category of large-growth funds for the last six months, the last year and the last three years. It also owns Eli Lilly (LLY), with a forward P/E of 9; Amgen (AMGN), with a P/E of 15; and Texas Instruments (TXN), with a P/E of 11.
Simpson made her quantum leap to fame with her Newlyweds: Nick and Jessica reality TV show, which followed her life with then-husband Nick Lachey. The show first appeared on MTV, a division of Viacom (VIA.B). Last month, Viacom reached a deal with Time Warner (TWX) to allow Time Warner to continue to broadcast MTV and 18 other channels. Viacom has a P/E of 6, much better than the industry average of 9. It is heavily indebted to the tune of $9 billion in debt, with only $525 million in cash, but its operating cash flow is $1.3 billion. It doesn't pay a dividend.
Viacom is one of the investments of Eminence Capital, a $4 billion New York-based hedge fund. Eminence also owns United Parcel Service (UPS), with a forward P/E of 14; Western Union (WU), with a P/E of 11; and Laboratory Corp. of America Holdings (LH), with a P/E of 15.
Simpson has been the celebrity spokesperson for several companies, including Proactive Solution. She has appeared in several Pizza Hut commercials, including a couple of advertisements that have appeared during Super Bowls. Pizza Hut is owned by restaurant holding company Yum! Brands (YUM), which just reported that its fourth-quarter profit tanked by 12%. Yum has a P/E of 14, $3.6 billion in debt and $29 million in cash.
Simpson has also launched a line of her own hair and beauty products on the Home Shopping Network, owned by HSN (HSNI). The company has recently generated negative earnings but has a forward P/E of 3.5. It has $388 million in debt with $56 million in cash. The stock sells at a huge discount to its book value of $42.69 per share.
Check out more Jessica Simpson stocks on Stockpickr.
Posted on Feb. 5, 2009
