Yahoo Finance 3 Stocks to Gain as Halloween is Around the Corner
The index of large-cap U.S. equities, the S&P 500, entered the correction territory on Oct 27 for the 103rd time in history. The tech-laden Nasdaq had already closed in correction territory last week. However, investors shouldn’t freak out! This isn’t a bear market, and the U.S. economy accelerated in the third quarter.
Most importantly, Halloween is approaching, and it marks the best span of growth, traditionally, for the stock market. Investors tend to start investing in All Hallows’ Eve after restraining in the prior six-month period, a tactic known as the Halloween Strategy. The demand for candies and costumes, in particular, increases, which eventually drives sales of U.S. retailers, including discount stores.
Halloween spending, in reality, is estimated to touch a record $12.2 billion this year, more than last year’s record of $10.6 billion, per the National Retail Federation (NRF). More number of Americans (73%) are expected to participate in Halloween this year versus last year’s 69%.
Similar to previous years, several consumers are projected to splurge on candies (68%), home decoration (53%) and costumes (50%). On an individual basis, consumers are expected to spend $108.24 each, more than the previous per-person spending record of $102.74 in 2021, added the NRF.
Total spending on candy is projected to reach $3.6 billion this year, up from $3.1 billion in 2022. Decoration spending is expected to come in at $3.9 billion, which is more or less on par with last year. Additionally, outlays on costumes are estimated to reach a record $4.12 billion, up from $3.6 billion last year.
Consumers are willing to spend as the economy continues to show signs of strength despite the Federal Reserve’s aggressive monetary policy stance to curb stubbornly high inflation and a slew of other global headwinds at the moment.
According to the U.S. Bureau of Economic Analysis, the third-quarter GDP of the United States increased at an annualized rate of 4.9%, the fastest pace in almost two years. The blowout GDP growth was primarily boosted by an uptick in consumer outlays.
To spend this Halloween, 40% of shoppers will go to discount stores, 39% to costume stores, and 32% will do online searches. This calls for investors to keep an eye on stocks such as Hershey HSY, Walmart WMT and The TJX Companies TJX due to an increase in footfall.
Hershey is one of the major confectionary manufacturers in the United States. The company is known for producing chocolates and candies across the globe. Hershey’s expected earnings growth rate for the current and next year are 11.9% and 7.2%, respectively.
Its shares are estimated to rise 8.4% over the next five-year period, while its shares have already gained 11.9% in the past five years. HSY currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Walmart is one of the biggest retailers worldwide that sells a wide variety of Halloween-related products, including costumes. Walmart’s expected earnings growth rate for the current and next year are 2.4% and 8.9%, respectively.
Its shares are estimated to rise 6.6% over the next five-year period, while its shares have already gained 6.7% in the past five years. WMT, currently, has a Zacks Rank #2 (Buy).
TJX Companies provides apparel and home fashions in the United States, and are well-poised to benefit from the pickup in costume sales this Halloween. TJX Companies’ expected earnings growth rate for the current and next year are 19.6% and 8.6%, respectively.
Its shares are estimated to rise 11.1% over the next five-year period, while its shares have already gained 9.6% in the past five years. TJX, presently, has a Zacks Rank #2.
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