Could a Bodega Help Your Stock Portfolio?
By: Doctor Stock Doc
Tags: Portfolio Management, Bodegas, Consumerism, Beer, Stocks

Spending long hours at a bodega could help you grow your wealth. Famed investor Peter Lynch was known for advising people to go to their local to see which stores people are spending the most cash at. From there, it would give him a good idea of which companies to research for his portfolio. However, shopping isn’t like it used to be. The entire retail landscape is going through a major transition in cities like New York City, but one thing stands for certain, bodegas aren’t going away. They provide a cheap and easily accessible way to obtain pretty much any item one can ask for in the Big Apple. People of all races, social class and age stop by boedegas and it’s why you can argue they’re the back bone of New York City. So, what can we learn from the New York Times’ adventure in a Brooklyn bodega?

During the New York Times’ bodega adventure, there were 320 items sold from the hours of 8pm to 4am. Brands were not specified, just the type of products. In order to determine a final analysis, it was important to research the top brand for each product. However, since stocks are being considered, those brands owned by private labels were eliminated. This made some categories like ginger shots seem tricky as there is not a major ginger shot brand owned by a public company. Top brands for each product were discovered through official market research available online or Amazon’s best selling items list. It was essential to avoid personal bias of the top brands as it would deflect the accuracy.

The products that were bought at the highest quantity were those that shouldn’t be a surprise for anyone that’s ever walked in a bodega. The top three were beer, bags of chips and cigarettes. Others at the top included juices, snack cakes and sodas. When looking at the top brands for each of these items, the possibly most-bought brands would be Bud Light (beer), Frito-Lay (bags of chips) and Marlboro (cigarettes). Since large conglomerates own all types of brands and products, once the top brands were jotted down for each product, the public company associated with them was listed as well. The public companies that own the most popular brands of the most-bought products are PepsiCo ($PEP), Anheuser-Busch ($BUD) and Altria ($MO). PepsiCo owns Frito-Lay, Aquafina, Gatorade, Pure Leaf, Tropicana and Chewy, Anheuser-Busch owns Bud Light and Altria owns Marlboro.

From this example of a night in Brooklyn, there was nothing too out of the ordinary, so it provides a great example of what products people are buying. It also shows some extra research provides us which stocks to purchase based on what people purchase on an average night. Investors will look through all sorts of reports, but sometimes the best research is what’s in front of you. In terms of which stocks hold the most popular purchased products, it’s interesting to note how to approach them as well. Anheuser-Busch has lagged in the last few years, but in good times and bad, people are always buying beer. Bud Light and Budweiser are two of the most popular beer brands in the United States and as long as people are drinking beer, which they always will, these brands will stay on top. Altria is an interesting one. Although the government is cracking down more and more on this company, people will continue to find a way to get their nicotine fix whether it’s an old-fashioned cigarette or an electronic one. PepsiCo is the most-eye popping one. If you’re looking for a safe consumer staple company, this is one to take a strong look at. The stock is priced over $100, but the 15.66 P/E ratio and the 2.78% dividend make it too difficult to pass on. PepsiCo doesn’t rely on one product, they own many large companies and are elite in so many categories. Regardless of the economy, people will always buy snacks, alcohol and cigarettes. Finding what people will buy just takes looking around a bodega, a little carefulness will help identify the major brands as well as those stocks associated with them.

For reference below is a list of the top public companies in order by products purchased on the night of the New York Times’ bodega escapade.