The Top 10 Fastest-Rising Mega-Brands
By Jonah Loeb Oct 23, 2012 9:50 am
Interbrand has outlined the 10 brands that are growing in value, but have their stock prices followed suit?
MINYANVILLE ORIGINAL Superlatives are always suspect. Saying that anything is "best" or "biggest" or even "most likely to succeed" is a risky move, and it's doubly so in the world of finance. However, branding consultancy Interbrand, a division of global marketing company Omnicom, has taken this responsibility on itself with its annual report on what it calls the "Best Global Brands," a designation measured by a combination of financial performance and conceptual brand value. Of interest to investors, of course, are the companies that have gained the most in the past year, and I have (at great personal risk) combed through the data to bring those to you. Here, according to Interbrand, are the biggest brands in the world that are still on their way up. (See also The Fastest-Falling Mega Brands)
Minnesota-based conglomerate 3M (NYSE:MMM) (MMM) starts us off at number 10. Interbrand's valuation of the company's brand has risen 18% since last year to $4.7 billion. The company's expansive strategy appears to be continuing, since it announced Friday that it would acquire industrial ceramics company Ceradyne (NASDAQ:CRDN) for $860 million. Investors have responded with relative optimism to the company's confidence, and 3M is currently trading at around $95 per share, an 18.7% increase over the past year.
The "People's Car" is a strong brand that's just getting stronger. Maker of the third most popular automobile of all time (the Volkswagen Golf, a car you can park on a dinner plate), Volkswagen (FWB:VOW) has made big progress as a green company, ranked fourth in Interbrand's "Best Global Green Brands" list this year. As the company looks to expand further, it is already benefitting from the Chinese boycott of Japanese cars; the group's Audi brand has seen its sales increase by 20% in the past month. Interbrand values the Volkswagen brand at $9.3 billion, an 18% increase since last year's valuation, and the market agrees: the stock has risen from €98.40 to €135.00 in the last year.
One of the most globally loved brands, Munich-based automaker BMW (FWB:BMW) has leveraged its class and elegance into a huge fanbase and some key endorsement deals (like the 2012 Summer Olympics in London). The company's neverending duel with Mercedes-Benz has kept it at the forefront of innovation among luxury vehicle makers, and its push into the electric vehicle market means that the first line of widely-produced luxury electric cars will be marked with the blue-and-white roundel that is one of the most widely recognizable logos anywhere. Interbrand values the BMW brand at $29.1 billion, an increase of 18% since last year, founded on modest gains in the stock market: BMW rose from €53.75 a share to €60.85 a share this year, although it peaked at an impressive €73.76 this past spring.
Hey, another American company! This one I've heard of. They do some kind of website, right? Fact is, they do a lot more, and 2012 was a big year for the development team at Google (NASDAQ:GOOG) (GOOG). Google TV, Google Drive, and head-mounted display Google Glass all took off this year, and while the company is still prone to big misses (Google Wave, Google Buzz, Google+), its diversified strategy is driving it to innovate in more ways than ever. Interbrand names the company at No. 4 worldwide, valuing its brand at $69.7 billion, a huge 26% jump from last year. This is based largely on the stock leaping from $543.18 to an astonishing $753.08 in less than a year. While it's still having trouble outmuscling its competitors (Facebook in the social media world, a certain fruit-based company in the tech world), Google has established a foothold as a place at which the smartest people in the world are desperate to work.
Possibly in the most precarious position on this list is Silicon Valley corporation Oracle (NASDAQ:ORCL) (ORCL), a developer of hardware and database management systems that is pushing up against some very stiff competition. Currently No. 3 in the database software market behind Microsoft (NASDAQ:MSFT) (MSFT) and IBM (NYSE:IBM) (IBM), Oracle has grown fast on the strength of a few good acquisitions (Sun Microsystems, among others) and a few strategic lawsuits, including one against Google that could have big implications for the Android's operating system. Interbrand values the brand at $22.1 billion, a 28% growth from last year, but warns that Oracle "will need to keep pace and develop more emotional connections with its consumers in order to see itself into the future." Investors are relatively optimistic; the stock price has risen to $35.78 from a December low of $25.51.
Whoever is running the research and development department at Nissan (OTC:NSANY) deserves a cookie. The past year or two have been absolutely massive for the Yokohama-based automaker, largely due to its fully-electric Leaf model that grabbed three Car of the Year awards in 2011 and continues to be one of the few viable all-electric cars, especially for urban areas. Nissan is also spreading internationally (98% growth in India is a big deal) despite the current rift with China. Interbrand, optimistic about Nissan's upcoming line of new models, values the brand at $4.97 billion, a whopping 30% increase from last year. Investor confidence is at odds with Interbrand's, interestingly: the stock was as high as $21.72 in April, but it's currently trading near its yearly low at $16.85 a share.
Everywhere I look, there's Samsung (OTC:SSNLF) (SSNLF). Sponsoring the Olympic torch relay. Sponsoring the vile, villainous Chelsea FC. Losing a copyright trial to Ap… well, okay, maybe it's not all positive, but Samsung has certainly never been bigger. Interbrand pegs the Suwon, South Korea-based electronics company at $32.9 billion, a 40% increase from last year, and it's no surprise, since the company's stock has ballooned from 881,000 South Korean Wan ($793) to 1,304,000 SKW ($1,174) in 2012. And Samsung's brand is absolutely massive: It's all over the mobile phone market, including not only the Galaxy SIII (which is gorgeous) and the Note (which is super gorgeous) but also its own Windows phone. The company is making major inroads in the PC and home entertainment markets as well. This is a company that is moving in the right direction.
Just a partial list of Amazon's (NASDAQ:AMZN) (AMZN) acquisitions is pretty staggering: IMDb, Alexa Internet, Audible.com, Zappos, Kiva Systems, LivingSocial, Lovefilm. My goodness. For a company that started out as a simple Web-based bookstore, Amazon has gotten positively huge. Interbrand values the company's brand at $18.6 billion, a 46% increase from last year, on the strength of the Kindle's progress from simple e-reader to viable iPad competitor and the company's stock price rising from a low of $173.10 on the last trading day of 2011 to a solid $244.51. While Amazon still has problems to overcome (stiff competition from Netflix in the streaming video market, for one), the company has a couple of aces in the hole - like the Kindle - that should keep it growing for some time.
Who else? In the past year, Interbrand's valuation of the Apple (NASDAQ:AAPL) (AAPL) brand has more than doubled, shooting up 126% to $76.6 billion. Apple has become a sort of J.K. Rowling of the tech world, with every new release marked by huge lines at stores, followed by weeks of equal parts furious argument and joyous celebration. The successful patent infringement lawsuit against Samsung, the stock price rising from $400.29 to over $700 after the launch of the iPhone 5 but falling to just $640 within weeks, the tantalizingly just-out-of-reach announcement of the miniature version of the already ubiquitous iPad…the story of Apple's year reads like some heroic saga about a larger-than-life mythical hero from Cupertino, CA. Meanwhile, CEO Tim Cook reclines like Smaug on his giant pile of iPhones, loving every minute of it.
No positions in stocks mentioned.