The end of the year is in sight, and with Thanksgiving coming on November on 23rd, now could be the time to buy some seasonal on-trend stocks for the portfolio.
Investors may tend to some last-minute allocations as the “Thanksgiving effect” takes hold in the lead up to the holiday. Not all stocks are holiday winners that gain from seasonal spending. However consumer-facing firms, be they food brands, retailers or platforms, have particular potential to outperform.
Here are some timely buys to gobble up along with the turkey this year.
As the country’s leading ecommerce platform, Amazon is positioned to reap the rewards of increased consumption and gift giving that marks year-end celebrations. Amazon Fresh has announced special Thanksgiving meal deals, and with Black Friday around the corner, it looks set to cash in on the shopping bonanza.
Amazon has delivered shareholders a eye-watering year-to-date return of 66 percent. Its balance sheet boasts are in fine form. Total revenue leaped of 12.6% as per its latest earnings report, clocking an impressive $143 billion.
Known for its Thanksgiving family meal kits, at this time of year Costco offers budget shoppers deals worthy of celebrating. The chain store will draw on its loyal member base and broad range of festive produce and products to try and generate bumper revenue in the coming weeks.
Costco is currently trading at over $560, up a market-beating 25 percent year-to-date. Profits seem robust. Its earnings per share (EPS) are projected to be $3.43 ahead of its next call on December 14 – an eye-popping 10.65% rise from the same quarter last year.
Bargain Food Brands?
Portfolios could also get a bump from the table spread. According to previous studies by Bank of America, Campbell's Soup Company (CPB), General Mills (GIS), The Kraft Heinz Company (KHC), Conagra Brands (CAG), Hormel Foods Corporation (HRL), McCormick & Company (MKC), and The Duckhorn Portfolio, Inc. (NAPA) have the most exposure to Thanksgiving staple like turkey, stuffing, gravy, potatoes, and wine.
Unlike Amazon and Costco, which both boomed this year, all of these food brands are trading at a loss year-to-date in 2023.
Campbells’ Soup is trading around $40, down 15 percent year-to-date, and hasn’t been near these new lows for nearly two years. Kraft has fallen further – 18 percent over the year. Yet most of these brands have a price-to-earnings ratio between ten to 20 – way below the multiples of Amazon and Costco. Could these legacy brands be trading at a discount?
It is impossible to say. As always with investing, past performance is no guarantee of future results. Nonetheless, discussing the future price action of these brands over dinner with relatives can make for a great conversation starter this Thanksgiving.