12 Best Kid-Friendly Stocks to Buy Now

Published on November 9, 2022 at 3:32 pm by Usman Kabir in Hedge Funds, News

In this article, we discuss the 12 best kid-friendly stocks to buy now. Parents have long wondered about a good way of teaching money management to their children. Getting kids interested in the stock market and then investing in different firms might be the perfect way to do that. For children, it is perhaps best to get started with big brands that are household names. Some of these, like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:META), are likely to be safe investments for kids as they start learning about the market. This is also an excellent time to buy these stocks as they are on sale and are likely to deliver positive returns over the long-term.

Kids usually pick up financial habits from their parents, and these stocks are some of the best investments for adults as well. Children can learn about budgeting, saving, and investing as they experiment with stocks. Investing takes a good amount of sacrifice and patience as well, both traits that are critical for the development of kids. One of the best possible gifts that a parent can give their child is money management lessons and investing in the stock market is a fun way of delivering such a gift.

Our Methodology

The companies that make products for children were selected for the list. The analyst ratings of these firms and the latest updates related to them are also discussed to provide some additional context. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Pixabay/Public Domain

Best Kid-Friendly Stocks to Buy Now

12. Funko, Inc. (NASDAQ:FNKO)

Number of Hedge Fund Holders: 18

Funko, Inc. (NASDAQ:FNKO) is a pop culture consumer products company, designs, sources, and distributes licensed pop culture products in the United States, Europe, and internationally. It is one of the best kid-friendly stocks to invest in 2022. On September 13, Funko stated that it will open its first co-branded retail experience, a pop culture lifestyle brand, in partnership with a famous rapper Snoop Dogg in early 2023. Tha Dogg House will sit next to Snoop Dog’s Clothing, California.

On October 13, Jefferies analyst Andrew Uerkwitz took over coverage of Funko, Inc. (NASDAQ:FNKO) stock with a Buy rating and $30 price target, noting that the company’s Interactive Entertainment Team took over lead coverage of Toys & Entertainment Products coverage.

At the end of the second quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $196.8 million in Funko, Inc. (NASDAQ:FNKO), compared to 20 in the preceding quarter worth $161 million.

Just like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Funko, Inc. (NASDAQ:FNKO) is one of the best kid-friendly stocks to buy now according to elite investors.

11. The Hershey Company (NYSE:HSY)

Number of Hedge Fund Holders: 43

The Hershey Company (NYSE:HSY) engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. It is one of the top kid-friendly stocks to invest in 2022. On September 9, The Hershey Company stated that it will spend $90 million to open two new production lines in a Mexican plant in the state of Nuevo Leon. This will increase the output of the company by 25% and will create 300 new jobs.

On October 20, Deutsche Bank analyst Steve Powers maintained a Hold rating on The Hershey Company (NYSE:HSY) stock and raised the price target to $230 from $227, noting that the company expects another set of strong results in Q3.

At the end of the second quarter of 2022, 43 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in The Hershey Company (NYSE:HSY), compared to 40 in the previous quarter worth $1.4 billion.

10. Electronic Arts Inc. (NASDAQ:EA)

Number of Hedge Fund Holders: 46

Electronic Arts Inc. (NASDAQ:EA) develops, markets, publishes and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It is one of the premier kid-friendly stocks to invest in 2022. On October 31, Electronic Arts disclosed that it has made a partnership with Marvel, an American entertainment company, to build at least three new action-adventure games based on Marvel’s heroes for personal computers and consoles. The first game will be produced on Iron Man, a Marvel character.

On November 2, Wedbush analyst Michael Pachter maintained an Outperform rating on Electronic Arts Inc. (NASDAQ:EA) stock and lowered the price target to $164 from $170, noting that the company delivered bookings below Street estimates, but with EPS beating estimates.

Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Electronic Arts Inc. (NASDAQ:EA) with 1.5 million shares worth more than $182.6 million.

In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Electronic Arts Inc. (NASDAQ:EA) was one of them. Here is what the fund said:

“Electronic Arts Inc. (NASDAQ:EA) is also developing as we would expect. The business enjoyed strong engagement last year with players of EA games spending 20% more time than even during 2020, helped by the delayed sales of the PS5 console. A potentially important development is the ongoing negotiation between EA and FIFA regarding the licensing of the FIFA brand for the EA football game. Strongly worded public statements have been slung from both parties as part of the negotiation process, but this could certainly be an opportunity for EA.”

9. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Holders: 50

McDonald’s Corporation (NYSE:MCD) operates and franchises McDonald’s restaurants around the world. It is one of the elite kid-friendly stocks to invest in 2022. On November 1, McDonald’s revealed that it has launched its new World of Wakanda Happy Meal inspired by Marvel Studios’ Black Panther: Wakanda Forever, which will be released on November 11 in theaters.

On October 28, RBC Capital analyst Christopher Carril maintained an Outperform rating on McDonald’s Corporation (NYSE:MCD) stock and raised the price target to $295 from $275, highlighting that the company’s Q3 earnings beat the expectations.

At the end of the second quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in McDonald’s Corporation (NYSE:MCD), compared to 58 in the previous quarter worth $2.7 billion.

8. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 60

The Coca-Cola Company (NYSE:KO) is a beverage company, that manufactures, markets, and sells various non-alcoholic beverages worldwide. It is one of the major kid-friendly stocks to invest in 2022. On October 31, Thor Equities disclosed that it has acquired a former Coca-Cola bottling plant in Madrid for its planned data center campus. On October 18, Engine No. 1, a sustainability-focused investment firm, held talks with Coca-Cola on the subject of recycling bottles and cans.

On October 26, UBS analyst Peter Grom maintained a Buy rating on The Coca-Cola Company (NYSE:KO) stock and raised the price target to $68 from $63, highlighting that company’s Q3 earnings were impressive as its organic growth more than offset incremental currency headwinds.

At the end of the second quarter of 2022, 60 hedge funds in the database of Insider Monkey held stakes worth $28 billion in The Coca-Cola Company (NYSE:KO), compared to 64 in the preceding quarter worth $29 billion.

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Coca-Cola Company (NYSE:KO) was one of them. Here is what the fund said:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (The Coca-Cola Company (NYSE:KO)). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”

7. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 65

CVS Health Corporation (NYSE:CVS) provides health services in the United States. On November 1, Walgreens Boots, Walmart and CVS health revealed that they have reached a tentative agreement to pay more than $12 billion for the sale of opioid painkillers to states and local governments. CVS will pay $4.9 billion, Walgreens minimum $4 billion and Walmart will pay $3 billion.

On October 20, BofA analyst Michael Cherny maintained a Buy rating on CVS Health Corporation (NYSE:CVS) stock and lowered the price target to $118 from $122, noting that the company expects Q3 results to be generally steady with well-understood near-term tailwinds and headwinds.

Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in CVS Health Corporation (NYSE:CVS) with 3.4 million shares worth more than $312.7 million.

In its Q3 2022 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and CVS Health Corporation (NYSE:CVS) was one of them. Here is what the fund said:

“CVS Health Corporation (NYSE:CVS) is a leader in the provision of healthcare services in the USA. It has three main businesses: an enormous network of pharmacies, a health insurance company, and “prescription benefit management”, which is a kind of intermediary between insurance companies and pharmacies. This is the result of large acquisitions over the past 15 years – most notably of Caremark (2007) and Aetna (2018). The markets had deemed its acquisition of health insurer Aetna too expensive (and we agree), so CVS stock then fell into disfavour for a few years.

We took advantage of this in the summer of 2020 and brought the stock into our portfolio at a time when its price was pressed down still further by the coronavirus pandemic. CVS is a giant. It has revenues of USD 300 billion, making it one of the largest companies in the world. It is a relatively stable and highly profitable company with strong free cash flow. Over the past few years, CVS has focused primarily on reducing debt.

This is already much lower than it had been after the Aetna acquisition, and most of the cash is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to grow the company further. CVS trades at about 11 times annual earnings, which is a very appealing valuation given the expected future growth in profitability and overall modest cyclicality in its business.”

6. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 109

The Walt Disney Company (NYSE:DIS) together with its subsidiaries, operates as an entertainment company worldwide. On November 1, Walt Disney was testing building stronger connections between its streaming and product business, by setting up a pilot program to offer exclusive toy selections to Disney and subscribers.

On October 26, KeyBanc analyst Brandon Nispel maintained an Overweight rating on The Walt Disney Company (NYSE:DIS) stock and lowered the price target to $143 from $154, noting that the company’s traditional Media business is exposed to negative macro trends, but focus on sports positions it favorably.

At the end of the second quarter of 2022, 109 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in The Walt Disney Company (NYSE:DIS), compared to 113 in the previous quarter worth $5.2 billion.

In addition to Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:META), The Walt Disney Company (NYSE:DIS) is one of the best kid-friendly stocks to buy now according to elite investors.

In its Q2 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE:DIS) was one of them. Here is what the fund said:

“The Walt Disney Company (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade before the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”

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