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Tickers in this Article: CLX, NCR, HSY, RL, JAH, KO, WPO, AXP, CBY
Momentum investors, and those who invest in consumer goods companies, probably already have Jarden (NYSE:JAH) stock on their watch lists. This 100-plus brand agglomeration of businesses has been tearing it up in 2009, up 140% year-to-date (seven times the Russell 1,000 and above both its 50-day and 200-day moving averages). Topping things off, Goldman Sachs recently added it to its "Conviction Buy" list with a price target of $42. No doubt, there's a lot to like about Jarden but I believe investors are getting ahead of themselves in anticipation of the earnings bonanza the company will reap once good economic times return. While there's no reason to believe Jarden's earnings won't continue to improve, there are some alternatives worth considering at this point, all of them with similar revenues. IN PICTURES: Learn To Invest In 10 Steps

Alternative 1
Clorox (NYSE:CLX) introduced Green Works, its natural line of household cleaning products, in January 2008. Since the debut, sales have been extremely encouraging, contributing to a healthy profit for the entire cleaning division with fiscal 2009 earnings from operations before taxes were $410 million on $1.84 billion in sales, a 14% increase from operating earnings in 2008. While Clorox doesn't break out sales numbers in its 10-K, marketing research firm Information Resources, Inc. indicates Clorox's Green Works glass cleaner achieved $5 million in sales in its first 11 months on the market, compared to $1.1 million for Seventh Generation and $940,000 for Method, two of its natural products competitors. Clorox's success has even caught the attention of Procter & Gamble (NYSE:PG) who are rumored to be interested. Two things that look good, regarding Clorox compared to Jarden, are: its free cash flow to sales is 9.9% versus 2.7% for Jarden and its EBIT return on assets is 21.2%, compared to 2.6% for Jarden. There simply is no comparison.

Alternative 2
NCR (NYSE:NCR) has come a long way from making manual cash registers. Today, it's more than just a maker of retail hardware but a provider of products and services that help its customers interact with their customers. Case in point, it announced September 16 that it was installing Blockbuster DVD kiosks in all Publix supermarkets in the state of Florida by November 1. Publix customers will now be able to pick up a movie while buying the weekly groceries. While it's been a tough grind on many of its customers in retail and financial services, its second quarter handily beat analyst expectations with 13 cents earnings per share from continuing operations, 6 cents better than estimates. For the full-year, management expects EPS from continuing operations between 60-75 cents. Compared to Jarden, NCR's free cash flow to sales is much higher, at 6.5%, and its enterprise value is 5.6 times EBITDA, compared to 7.6 times for Jarden. Although NCR has some pension concerns on its balance sheet, it's certainly a better value play.

Alternative 3
Everybody is talking chocolate these days, after Kraft (NYSE:KFT) made a $16.7 billion bid to buy British confectioner Cadbury (NYSE:CBY). It looks like this battle could get messy, especially if Hershey (NYSE:HSY) makes a joint-bid with Swiss-based Nestle, the world's largest chocolate company or Cadbury turns around and attempts to acquire Hershey as a way to fend off Kraft. Either way, it's putting a positive light on the entire confectionery business, and that's a good thing for Hershey stock. Besides the arbitrage play, why should investors consider Hershey as opposed to Jarden? It's a four-letter word called debt. Jarden's level of debt is worrisome. If sales ever stall and interest rates rise dramatically, its goose is cooked. Total debt is 4.6-times EBITDA, compared to 1.7 times for Hershey.

Alternative 4
Owning great brands is the hallmark of Warren Buffett's investment style. Coca-Cola (NYSE:KO), Washington Post (NYSE:WPO), American Express (NYSE:AXP) - the list goes on. In apparel, there's no better name than Ralph Lauren (NYSE:RL). The company reinvented preppy forty years ago, and it's been styling ever since. In almost every respect, Ralph's business is sounder and stronger than Jarden. For instance, instead of owning hundreds of disparate brands, he's got Ralph Lauren, Polo, Club Monaco and Rugby. That's it. Simple, focused and just the way we like it. The only valuation metric that stands out in Jarden's favor is price-to-sales, where it trades at 0.46-times sales versus 1.56 for Ralph Lauren. Frankly, in terms of safety, owning Polo makes far more sense than Jarden.

The Bottom Line
While Jarden does have some great brands, it will ultimately pay the price for an ambitious acquisition program that's been piling on debt. When that will happen is anyone's guess. In the meantime, these are four healthy alternatives. (For more, see Analyst Forecasts Spell Disaster For Some Stocks.)

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