BOSTON ( TheStreet) -- Most of the world's wealthiest people have no conception that the rest of us have been living in a gut-wrenching recession for the past three years.Just look at their profligate spending: $400 for skin-tight, ripped blue jeans, $68 for a rubber mat to perform the ascetic practice of yoga, $9,000 for diamond earrings that look like chandeliers, and $100,000-plus for a car when the average American home sells for $260,000. Investors have taken note of this as shares of many luxury-goods purveyors are up by double-digits over the past three months. For example, the leisure-goods sector, as tracked by Morningstar, has risen 16.7% over the past three months and an annual average of 45% over the past three years, so the latest rally could be sustainable. So why fight it? Consider it an investment opportunity and buy stocks that have benefited from what is a consistently strong trend: wealthy people, especially the noveau riche, paying up for name-brand goods. A key factor for most of the luxury-goods sellers, and what bodes well for their futures, is that demand for brand-name, and what some call "aspirational" goods that suggest wealth, is booming in emerging market countries such as Brazil, Russia, India and China, in particular. Here are nine stocks that are benefiting from demand for their expensive products or services: Wyndham Worldwide ( WYN) Company profile: Wyndham is the world's largest operator of time shares, rentals and luxury hotels. Share performance: up 31% in the past three months; 28% in 2011; three-year average annual return of 68%. Investor takeaway: Morningstar found a unanimous eight "buy" ratings for its shares in a survey of analysts. The company has been taking care of shareholders as it set aside $600 million for share buybacks in 2011 and has the potential to reduce total shares outstanding by more than 15% over the next several years. It has also increased dividends per share more than three-fold since 2008," Morningstar said.
Coach ( COH) Company profile: Coach makes high-quality, brand-name goods, including handbags, leather accessories, business cases, footwear, jewelry, sunwear, travel bags, watches and fragrance products. It's seeing huge sales growth in China and Japan. Handbags sell for up to $420. Share performance: up 16.6% in the past three months; 12% in 2011; three-year average annual return of 43%. Investor takeaway: Morningstar analyst Paul Swinand wrote that, "even during the challenges of the recession, Coach's fundamentals were excellent, with three-year historical operating margins above 30% and returns on capital around 40%." Free cash flow generation also has been high, historically greater than 20% of revenue. S&P Capital IQ has it rated "strong buy" with five stars, its highest rating. It gives its shares a $77 price target, a 23% premium.
Daimler ( DAI) Company profile: Daimler has some of the top luxury car brands in the world including Mercedes-Benz and Maybach (which it's phasing out). It also owns stakes in a wide range of other automakers. Share performance: up 8.7% in the past three months; down 30% in 2011; three-year average annual return of 11.3%. Investor takeaway: S&P has it rated "hold." But Morningstar says the company's "brand equity, combined with cost-cutting initiatives, gives it the ability to report strong profits as vehicle demand normalizes. Daimler's luxury brands are some of the most valuable in the world and give the company some protection against the cyclical downturns of auto sales." And luxury-car sales are also on the rise. On Thursday, Daimler said its Mercedes-Benz cars division's global sales hit a record 1.36 million, a rise of 7.7% year-over-year. In the U.S., 2011 sales rose 13%, and German luxury-car rival BMW ( BMW) had similar gains. In particular, it's seeing booming sales in Russia, Brazil, India and China. Capital Research and Management (American Funds) owns almost 4% of its shares, more than double that of the next largest shareholder. The German company doesn't have significant U.S. analyst coverage.
Ruth's Hospitality Group ( RUTH) Company profile: Ruth's Hospitality Group is the owner, operator and franchiser of upscale steakhouses, primarily under the Ruth's Chris name. It has about 130 restaurants worldwide, about half of which are company-owned. Morningstar says the average check is $75. It's definitely a small-cap stock at a $190 million market value. Share performance: up 28% in the past three months; up 8% in 2011; three-year average annual return of 46%. Investor takeaway: Fidelity owns 14% of its shares, double that of the next highest investor. S&P, which doesn't rate it, said Wall Street analysts give it three "buy" ratings, one "buy/hold" and three "holds."
Brunswick ( BC) Company profile: Brunswick makes a wide range of recreational products, including Sea Ray, Boston Whaler and Bayliner boats, Mercury and Mariner outboard engines; fitness equipment, under the Life Fitness and Hammer Strength brands; and billiards and bowling equipment. Share performance: up 22% in the past three months; down 3.4% in 2011; three-year average annual return of 54%. Investor takeaway: The recession hurt boating industry sales across the board, but Brunswick stayed afloat, which means it can gain market share as competitors sink into oblivion. But the industry may never return to the glory days of 2007 to 2008. Mutual fund firms appear to like it as Wellington Management owns 11.7% and Fidelity 10% of the company's outstanding shares. A Morningstar survey of analysts found five "buy" ratings, one "outperform" and three "holds."