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Proprietary Data Insights Top Restaurant Stock Searches This Month
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Teenage Wasteland Some people invest in what they know. Others invest in the brands young people, particularly teens, care about. Because if the kids think it’s cool, it must be cool. And despite their reputation for being fickle, if kids like it and use it, maybe it has a future. In today’s Juice, we look at investment bank Piper Sandler’s annual survey on teen spending and brand preference. First, general info. Then, a look at the stocks of the top publicly traded brands Piper says teens are into.
Even though Piper conducted this survey between August 12 and September 23 – with inflation raging – it still found teen spending increased 3% year-over-year (to $2,331). However, spending was down 2% from last spring. Where do teens get spending money?
Now, let’s look at the publicly traded brands teens spend their – and their parents’ – money on. We’ll see how the stocks of the top names in each category have performed versus the broad market. |
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All the Brands Teens Love, Including Netflix |
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Key Takeaways:
You probably expected TikTok and Snapchat (SNAP) to dominate social media use among teens: But maybe you didn’t expect this: 32% of teens still use Netflix (NFLX) – even more than Alphabet’s (GOOG, GOOGL) YouTube – to consume content. So despite recent subscriber losses and the attendant hysteria, maybe Netflix hasn’t gone the way of Facebook (META) with young people. The Juice still thinks Stranger Things has a lot, if not everything, to do with it. That debate aside, following teens into streaming and social media stocks wouldn’t have boded well for you over the last year. Ouch. We didn’t include Alphabet because YouTube contributes very little to the company’s overall revenue. And, of course, TikTok isn’t (yet) publicly traded. It’s unfair to judge the efficacy of teen stock picking (even if they didn’t know they were picking stocks!) using streaming and social media. Everyone’s getting killed in that space. So let’s zoom out. Beyond content consumption, here are the top areas for teen spending and where they’re doing it most:
Starbucks as the top publicly traded restaurant for teens doesn’t surprise us. Our bull thesis on the stock focuses in part on how well the company does with Gen Z. With SBUX the loser and MCD the clear winner, the four publicly traded names of the bunch have performed quite well against the SPDR S&P 500 ETF Trust (SPY) over the last year. Not only teens and The Juice love SBUX long-term. Our sister newsletter, The Spill, recently contributed an in-depth bullish analysis. We regularly see kids in the local Starbucks and Chipotle. From there, they often hit the convenience store to get, according to the survey, one of their five favorite snacks:
Who owns these snacks? PepsiCo (PEP) owns three: Lay’s, Doritos, and Cheetos. Campbell Soup Company (CPB), through its Pepperidge Farm division, owns Goldfish. And the Kellogg Company (K) owns Cheez-It. Three solid, market-crushing stocks in a category The Juice loves: consumer staples.
Not good.
Other highlights:
A mixed bag against the S&P 500’s 18% decline over the last year.
The Bottom Line: There’s a reason Piper Sandler, a big investment bank, does this survey every year. Because young people can help us see the future from an investing perspective. Keywords: help and future. While there’s utility in looking at what Gen Z does as consumers and actual investors, it’s just one factor that contributes to the due diligence we do on stocks. So it helps us craft a narrative and make well-rounded, informed decisions. At the same time, seeing how young people behave with brands can help us spot trends, emerging brands (such as pre-IPO Shein), and companies that will stand the test of time, as generation after generation become and remain loyal to them. Think Starbucks, Amazon, McDonald’s. |
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