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Best Christmas Stocks

By Jim Fink on December 23, 2010

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‘Tis the season to be jolly. The mother of all birthday parties, Christmas is the day that 2.2 billion Christians – a third of the world’s population – celebrate the “virgin” birth of Jesus, a nice Jewish boy from the town of Nazareth in Northern Israel. As Yiannis Mostrous, editor of Silk Road Investor and a native Athenian, likes to say, the first virgin birth actually occurred much earlier in Greece, when Zeus came down from the heavens in the form of a golden shower to impregnate Danae, who later bore Perseus. 

One thing that Greeks did not experience first, however, was an “immaculate conception.” Although Mary, Jesus’ mother, was born naturally of two human parents, she reportedly was the first and only person ever conceived free of Adam and Eve’s original sin. No water immersion (mikveh in Judaism and baptism in Christianity) required for Mary. In contrast, Jesus needed to be baptized and it was performed by John the Baptist in the Jordan River near the town of Jericho.

The word Christmas means literally “Savior’s mission.” According to Christians, Jesus was the “Christ” (savior or messiah) who came to earth so that he could sacrifice himself on the cross in order that the sins (including original sin) of all believers (both present and future) would be forgiven and they would be reconciled with God in a state of grace similar to that of Adam and Eve before their fall. Although Christmas is a beloved holiday celebrating the birth of a special man, it is second in importance to Easter, which celebrates Jesus’ resurrection as a god. I think I’ll stop there because I am not a Christian theologian and I don’t want to put my foot in my mouth anymore than I already have.

Christmas in June?

Christmas is celebrated on December 25th, but nobody really knows when Jesus was born. Early Christians living in Egypt around 200 A.D. celebrated his birth on May 20th. Australian scientists have concluded that the proper date is June 17th in the year 2 B.C. because that is when the planets Venus and Jupiter were so close together that they created a single beacon of light which appeared suddenly as a “Christmas Star.”

Christian theologians probably chose December 25th because it is exactly nine months (the gestation period of babies) after March 25th, which is Annunciation Day, the day when Mary was informed that she had conceived a very special baby. This begs the question why March 25th was selected as Annunciation Day. I think it has to do with the spring equinox, which occurs after the last frost in many areas and signifies that it is safe to begin planting seeds.

A second theory as to why December 25th was chosen is that Christian theologians wanted to co-opt a Germanic pagan winter festival known as “Yule,” which celebrated the winter solstice, the date when sunlight begins to grow longer every day. The phrases “yuletide greetings” and “yule logs” are remnants of this pagan festival.

Santa Claus is Cool

Despite its religious origins, a secular version of Christmas is celebrated by many non-Christians. Children the world over look forward to receiving presents from Santa Claus, a chubby white bearded man who wears a red suit and flies around once a year in a reindeer-driven sleigh, living the rest of the year at the North Pole with his toy-making elves. What’s that Yiannis? Oh yeah, Yiannis wants me to remind you that Santa Claus is based off of Saint Nicholas, a 4th-century Greek bishop who lived in modern-day Turkey.

Goodwill Towards Men

I’m not religious, but I look forward to Christmas. It’s a time of bright colored lights, melodic songs, and gift-giving. C.S. Lewis, author of the Chronicles of Narnia and one of my favorite childhood writers, was an atheist as a young man but converted to Christianity later in life out of what he called a yearning for “joy.” I think most everyone, regardless of religious affiliation, has a yearning for joy and Christmas provides that joy during the depressing and dark wintertime. Furthermore, any holiday that celebrates “peace on earth and goodwill towards men” is worthwhile in my book. 

Best Christmas Stocks

Now that we’re sufficiently in the Christmas spirit, below is my top-five list of best Christmas stocks:

1.  Mattel (NYSE: MAT) and Amazon.com (NasdaqGS: AMZN)

Christmas gift-giving is based on love and friendship, but it also means big business for toy manufacturers and retailers. Some retailers generate a third of their annual sales during the period between Thanksgiving and Christmas. After an 0.9% sales decline in 2009, the 2010 Christmas shopping season is looking to be up 4%, which is considered healthy. Online retail sales are even stronger, up 12%.

My first stock is Mattel because it makes the toys that Santa Claus brings to good children. Some of the most popular toys this year are James Cameron’s Avatar Movie Masters, HotWheels Color Shifters, and Barbie and the Three Musketeers Viveca Doll. All are Mattel products.

Toy manufacturers need retailers to distribute their products and nobody is better at distribution than online retailer Amazon.com.  It’s the low-cost provider and enjoys tremendous customer loyalty. Amazon is also a leader in cloud computing, which is taking the online tech world by storm.

2. Dean Foods (NYSE: DF)

What’s Christmas without eggnog. Eggnog is short for “egg and grog.” That’s right, you can get both fat and plastered drinking eggnog.  But nothing tastes better if it is prepared properly. Some of the best eggnog is made by private local dairy farms, but among national brands, my favorite is Land O’Lakes eggnog. Land O’Lakes is a private agricultural cooperative, but it licenses its name to Dean Foods for milk products. 

Dean Foods is by far the largest milk distributor in the U.S., but its stock has suffered lately due to high debt levels and low milk prices. Oh, and its CFO left recently for a higher-paying gig at McGraw-Hill (NYSE: MHP). No doubt about it, Dean Foods is a risky stock, but aggressive investors could make a killing if things turn around.

3. Viacom (NYSE: VIA-B)

The greatest Christmas movie of all time is Frank Capra’s 1946 classic It’s a Wonderful Life starring Jimmy Stewart and Donna Reed. George Bailey, Clarence the angel, Henry Potter the mean banker, and idiot Uncle Billy are all characters that are permanently etched into our national consciousness. If you want to see the movie for free, tune in tomorrow night (Christmas Eve) at 8:00 PM on NBC. Don’t forget to bring a jacket, however, because Bedford Falls is quite cold this time of year.

Paramount Pictures owns rights to the movie and Paramount, in turn, is owned by Viacom. In total, Viacom owns more than 2,500 films, including the Godfather series and Titanic. It also owns the Nickleodeon, MTV, and Comedy Central cable channels. In an industry where content is king, media powerhouse Viacom is a top choice.

4. P.F. Chang’s China Bistro (NasdaqGS: PFCB)

Virtually all stores are closed on Christmas Day except movie theaters and Chinese restaurants. Most Chinese are Buddhist or Taoist, not Christian. Consequently, they have no reason to close shop. They probably would anyway if it wasn’t for the business they get from Jews. It’s a Jewish tradition to eat out at a Chinese restaurant on Christmas according to U.S. Supreme Court Justice Elena Kagan and this song by Brandon Walker. 

Not all P.F. Chang’s are open on Christmas (including, unfortunately, those near me in Northern Virginia), but some definitely are, including the one in Westbury, NY (open 1:00 PM to 11:00 PM). I recommend the chicken lettuce wraps and the beef and broccoli. I’d avoid the pork and shrimp, however.

5. Weyerhaeuser (NYSE: WY)

Like eggnog, most Christmas trees are sold by private farms. However, these tree farms need to get good seedlings from somewhere and timber company Weyerhaeuser provides the expertise. Thanks to Weyerhaeuser (don’t forget the “e” after the “a”), people all around the country can get hearty and sweet-smelling Christmas trees. Good genes matter, whether it is people or trees.

The timber giant with six million acres of trees is converting to a real estate investment trust (REIT) and will triple its dividend starting in Q1 2011. The juiced-up yield will be around 3.3% at Weyerhaeuser’s current stock price.

A very merry Christmas to all!

P.S. Are you like my wife who can’t tell the difference between the pronunciations of Mary, Marry, and Merry? They all sound very different to me, but I’m from New England and she’s from D.C.

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