Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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

Biotech Insider Alert - $5 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!