5 Stocks To Watch Ahead Of Halloween

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The upcoming holiday offers something to look forward to for candy and snack food makers such as
Hershey CoHSY
and
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Mondelez International IncMDLZ
, retailers such as
The Kroger Co.KR
and
Wal-Mart Stores, Inc.WMT
, and even entertainment giant
Twenty-First Century Fox IncFOXA
. Whether it is on costumes, decorations, party goods or candy, the
National Retail Federation
(NRF) estimates that spending on Halloween will total about $7.4 billion this year, up by half a billion from last year. Spending by Americans for the holiday is more than 50 percent higher than in 2005, and Halloween is the fourth most profitable holiday period for retailers, after Christmas, back to school and Mother's Day. Here is a quick look at how the five stocks mentioned above have fared recently and what analysts expect from them. See also:
5 Companies That Boost Hiring For The Holidays

Hershey

The largest chocolate manufacturer in North America is the name behind such trick-or-treat favorites as Kit-Kats, Reese's Pieces, Twizzlers and Hershey's Miniatures. Its market capitalization is about $20.8 billion and its dividend yield is near 2.3 percent. Its operating margin is greater than the industry average and the return on equity is about 55 percent. Note that only five of the 14 analysts surveyed by Thomson/First Call recommend buying shares, though only one rates the stock at Underperform. The share price rose more than five percent in the past month before pulling back last week. The stock has underperformed Mondelez over the past six months.

Kroger

The NRF expects about a quarter of all Halloween spending to happen at grocery stores. Kroger is the nation's second largest supermarket operator, and Barron's this weekend made a case for 20 percent growth in the shares of this $26 billion market cap company, even though the stock is trading near the multiyear high. Fourteen of the 23 surveyed analysts recommend buying shares, with eight of them rating the stock at Strong Buy. Shares hit a series of new multiyear highs through the summer and reached higher again in the after-hours Friday. The stock has outperformed Wal-Mart and Whole Foods over the past six months.

Mondelez

The snack foods business of the former Kraft Foods is the home to such brands as Cadbury, Oreos and even Ritz crackers. It has a market cap near than $57.7 billion and a dividend yield of about 1.8 percent. The long-term earnings per share (EPS) growth forecast is more than 14 percent and the price-to-earnings (P/E) ratio is less than the industry average. Of the 21 analysts surveyed, 13 recommend buying shares, with five of them rating the stock at Strong Buy. Shares have retreated about four percent over the past month. However, over the past six months, the stock has outperformed Hershey and Nestle, though it has underperformed the S&P 500.

Twenty-First Century Fox

One of the most anticipated upcoming films for the season is the 3D computer-animated adventure comedy "The Book of Life" from Reel FX Creative Studios and distributed by 20th Century Fox. The parent company sports a market cap near $74.2 billion and offers a dividend yield of about 0.7 percent. The P/E ratio is less than those of competitors such as CBS and Disney. All but three of the 25 analysts polled recommend buying shares, which has been the consensus recommendation for at least three months. Shares surged following better than expected quarterly results in August but have pulled back more than 5 percent in the past month. The stock has underperformed competitors Disney and Time Warner over the past six months. See also:
Betting On Wine: An Alternative Investment

Wal-Mart

The NRF projects that discount stores like Wal-Mart will rake in about half of all Halloween spending, as they offer shoppers one-stop shopping for all their holiday needs. Wal-Mart's market cap currently is less than $250 billion. It has a dividend yield of about 2.5 percent, and the return on equity is more than 21 percent. The consensus recommendation is to hold shares, and it has been more at least three months. The share price is in the same neighborhood as a month ago and also about the same as six months ago. Over that past six months, the stock has underperformed rivals Costco and Target.
At the time of this writing, the author had no position in the mentioned equities.
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