Your Christmas shopping list may hold the key to future riches if you read it in a different light. It’s not simply a checklist of needs coupled with a smattering of wants. It’s also the key to finding the best stock deals of the holiday shopping season.
How so? Consider this list of best-sellers found at Amazon.com (AMZN).
- Men’s Passcase Billfold, No. 5 in Clothing, having spent 39 days as a top 100 seller in the category.
- Oster 4208 Inspire Electric Wine Opener with Wine Chiller, No. 1 in Kitchen and Dining.
- UGG Australia Women’s Classic Tall Boots, No. 1 in the e-tailer’s shoe department.
- Android tablets from Coby, PanDigital, and MID, the top 3 sellers in computers and accessories.
- The Kindle Fire and its four cousins, which comprise five of the top 10 sellers in electronics.
Each of these best-sellers has a public company behind it. So why not try a different strategy this season? How about matching your spending on gifts with an equal amount spent buying shares of common stocks, beginning with the five behind Amazon’s popular sellers? The future you — the one dependent on your retirement investing savvy — will be thankful.
5 Gifts That Could Keep on Giving
Here’s a closer look at the companies behind the hot holiday gifts:
1. Shares of Guess? (GES), the company behind the Passcase billfold, are down almost 40% as of this writing. Yet what’s bad news for current investors may prove good for those looking to open a new position. Shares of Guess? yield a market-besting 2.8% in dividends and trade for a relatively cheap price-to-earnings ratio of 9.7.
2. Jarden (JAH) is a consumer products conglomerate that includes Oster, Mr. Coffee, and Sunbeam among its consumer brands. Like Guess?, the stock pays a dividend, but growth is what makes the business attractive. Analysts see profits growing 11.4% annually over the next five years, yet the stock only trades for eight times those forward estimates. This could indicate a bargain.
3. UGG boots were an Oprah favorite for years and remain a staple for Deckers Outdoor (DECK). The stock has crushed the market over the past year and analysts see still more growth ahead. Going by Wall Street’s estimates, Deckers is priced about in line with the rest of the footwear industry and is noticeably cheaper than top-dog Nike (NKE).
4. Google (GOOG), the big company behind Android, is finding a wide audience for its mobile operating system, and is taking market share from Apple (AAPL) and everyone else in the industry. The Big G doesn’t pay a dividend, but if you believe in a future populated with smarter mobile devices that broadcast ads and keep us in touch with social media, you can’t do much better than betting on Google.
5, Finally, let’s talk about Amazon. Though we don’t have the final numbers, it’s probably safe to say the e-tailer profited more than most from the biggest Black Friday in U.S. history. Selling some of the most popular e-readers out there — and in the case of the Fire, the most serious threat to Apple‘s iPad we’ve yet seen — should only add padding to Amazon’s already-cushy profits.
Holiday Portfolio Strategy
What if you have yet to open a portfolio? Getting started is easy. First, choose a broker. Then take the money you’ve set aside — your gift-matching funds — and set aside half or perhaps up to three-quarters for your new stock purchases. Divide the available funds by five and then use funds to buy five equal stakes in each stock.
Bam! You’ve got a portfolio. Wasn’t that simple? Heck, it can even be fun when you treat shopping as investment research. So make a list, check it twice, and be on the lookout for the good stocks behind the great sellers.
Motley Fool contributor Tim Beyers owned shares of Apple and Google at the time of publication. The Motley Fool owns shares of Guess?, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Deckers Outdoor, Apple, Google, Nike, and Amazon.com, as well as creating a diagonal call position in Nike, creating a bull call spread position in Apple, and writing covered calls in Guess?
Tagged: Android, Apple Inc, christmas shopping, ChristmasShopping, Deckers Outdoor Corporation, Google Inc, guess, holiday gifts, HolidayGifts, Jarden, Mr Coffee, MrCoffee, Nike Inc, Oster, Stocks to buy,