It is nothing short of amazing how the Super Bowl has evolved over the years. It has gone from the novel idea of a title game between the original NFC against the upstart AFC (with plenty of empty seats at that first game) to the most-watched event on television and a de facto national holiday some 45 years later.
I watched my first Super Bowl with my dad when I was five years old. I remember several things about that day. It was the first time I saw the team I would root for the rest of my life, the Dallas Cowboys. It was also the first time I cooked my own steak on a grill (under close supervision, of course). Most important, it was the first of more than 30 Super Bowls I would watch with my father. It was a tradition that both of us took seriously. Even when I relocated across the country for work and there were years when I could not make it home for Christmas, I always found a way to come home to watch the big game with my dad. This culminated a few years ago when our hometown Arizona Cardinals came within a minute of pulling off one of the great upsets in Super Bowl history just a few months before my father passed away.
I have tried to carry on the tradition since then. Every year I host a party for friends and put out a great spread. This year bratwurst and sauerkraut will be going in one crockpot, and slow-cooked barbecued pork ribs in the other, with jalapeno cornbread warming in the oven. The Super Bowl is much more than a game. It is a time to gather with friends and family and celebrate an American tradition.
It also is about two other American traditions: food and advertising. We stuff ourselves to the gills and watch iconic brands spend more than $3 million a spot to roll out their very best ad work, kicking off a national advertising competition of its own -- a game within the game. Here are two picks inspired by those two traditions.
Following are four reasons Nathan's Famous (NATH) is a long-term bargain at just under $42 a share:
● I equate Nathan's and its hot dogs more with my beloved New York Yankees than I do with football, but that is changing as the company gains wider distribution for its products. It recently cut a deal with Smithfield Foods (SFD) that will greatly expand Nathan's distribution in early 2014.
● For a company with less than $200 million in market capitalization, Nathan's has huge brand recognition, especially in the Northeast. It's very likely the company will eventually become a buyout candidate for a larger player in the space.
● As of the September quarter, the company had a solid balance sheet with almost 15% of its market capitalization in net cash. It has also reduced share count from more than 6 million shares to a little more than 4 million shares over the last few years.
● For the nine months through the December quarter, non-GAAP earnings rose 30% year over year, while sales climbed 9%. The company also owns and operates five of its 304 restaurants (299 are franchised) as of September, so there is plenty of growth opportunity in that space as well.
Here are four reasons CBS (CBS) is a good value at $42 a share:
● The TV network is broadcasting this year's Super Bowl. All ad spots are sold, with the average 30-second spot garnering an incredible $3.8 million.
● CBS recently announced it is spinning off its outdoor billboard business as a $6 billion real estate investment trust, which is a solid catalyst for unlocking shareholder value for this piece of the business. It also should allow the rest of CBS to get a higher market multiple.
● The spinoff will reduce CBS's advertising revenue to 50% of overall sales from the prior 60%. The company is becoming more of a content provider. That is where the action is, given rising demand for content from new players, such as Netflix (NFLX).
● CBS goes for a reasonable 14x forward earnings, even after the recent share run-up. Management recently upped its dividend by 12%, and it has approximately $3 billion left on a stock repurchase program, which should shrink the share float by around 10% at current prices.
