Activision Blizzard, Inc. (ATVI), Mattel, Inc. (MAT): Buy These Consumer Stocks

Page 1 of 2

If you are bullish on the consumer economy, there are several stocks that you should consider. I recommend buying across multiple categories ranging from toys to gaming stocks. Below, I review two leaders in these respective fields and provide my take on why you should be optimistic about their futures.

Activision Blizzard, Inc. (NASDAQ:ATVI)

The innovative toymaker

Mattel, Inc. (NASDAQ:MATended 2012 with a bang. The results were generally strong with global net sales growth of 5%. Going forward, what makes me particularly optimistic is the company’s success in innovation: American Girl® saw global sales up 13% to offset slow momentum in Hot Wheels® and Fisher-Price®, which grew by 2% and 6%, respectively. The Barbie® brand also saw global sales drop by 4%. So, the company’s long-term growth story concerns maintaining stable brands while delivering momentum through new ones.

If nothing else, the company is a strong defensive investment off of a recovering economy. Dividends have been boosted by double-digits — continuing the company’s rich tradition of returning free cash flow to shareholders. This comes on top of the company repurchasing 2.3 million common shares for the fiscal year.

What attracts to me Mattel, Inc. (NASDAQ:MAT) is it’s simplicity. It: (1) develops cash cows; (2) innovates; and (3) returns free cash flow to shareholders. It’s a safe plan that has sent shares to their 52-week high and up 53% from the lows while paying a 3.2% dividend yield. With analysts expecting 9.4% annual EPS growth over the next five years, I believe the stock will outperform despite its stability.

For stronger upside, I recommend investing in LeapFrog Enterprises, Inc. (NYSE:LF). The stock is dirt cheap at slightly more than 7 times past earnings, and it is on a sharp growth curve. Analysts forecast 17.5% annual EPS growth over the next five years. With no debt and a current ratio of 6 times, LeapFrog is an ideal takeover target. As the leader in educational electronic toys, it can add considerable synergistic value to a suitor.

The always-growing game maker

Since its founding, Activision Blizzard, Inc. (NASDAQ:ATVI) has made several acquisitions in an attempt to improve its product portfolio and increase global presence. In 2011, the company acquired Beachhead Studios to further efforts in development of Call of Duty games — a strategy that has been paying dividends in light of how they have won back-to-back awards.

Some of the games we expect to see from Activision Blizzard, Inc. (NASDAQ:ATVI) in 2013 include The Walking Dead, Destiny and Deadpool.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!