Brand power…
This is the idea that some companies have brands that give them huge power in the market.
It’s hard to quantify. But the value is tremendous.
For example, would you rather buy a pair of new shoes from Amazon (AMZN)…
Or a company like Alibaba (BABA) known for its questionable products?
If you’re like most people, you’d go with Amazon, obviously.
Shipping is free…
You can return them if they don’t fit…
And you know they are going to arrive in two days or less.
You also know they won’t be knock-offs.
That’s what I mean by “brand power.”
And this brand power translates into stock price performance.
Better Brands Make Better Stocks
For example, take a look at the chart below, which compares the stock price performance of AMZN and BABA since Alibaba came public in late 2014.
As you can see, shares of AMZN have rallied over 750% since late 2014, while shares of BABA have actually fallen by 16%!
That’s a massive difference…
Now, there are numerous reasons for the huge performance discrepancy.
But I believe that a lot of it has to do with brand power.
The Apple Advantage
Let’s look at another excellent example…
One of the strongest brands I know of is Apple (AAPL).
They make incredible products, as many of you know.
I own an iPhone, an iPad, a MacBook, four Apple TVs, a set of AirPods…
The list goes on.
Why do I buy all of these Apple products?
Brand power!
When the company releases a new product, I know it is going to work.
It is going to sync up with my other devices. The software will be updated on a regular basis.
And although you can get a much more powerful PC for the same price as a Mac…
Many consumers still choose the Mac.
And it shows in the stock price!
Take a look at the chart below comparing the stock price performance of AAPL and the S&P 500 index over the past five years.
Shares of AAPL have rallied over 330% during that time, while the broader S&P 500 index is up just over 75%!
But brand power doesn’t just manifest itself in the stock market.
Here’s another example of Apple’s brand power…
Shopping malls give Apple a special break. The company pays no more than 2% of its sales per square foot in rent, compared with 15% for a typical tenant.
Why?
Because the Apple store brings more shoppers.
Having an Apple store location in a mall increases its foot traffic by 10% for all other stores in the mall.
In other words, everyone wins.
This is a remarkable display of company brand power.
And brand power is also why top-tier, market-leading stocks are usually the best investments.
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
The post Here’s Why Brand Power is So Important appeared first on Stock Surge Daily.
