Saturday, October 29, 2011

How to Invest in Halloween

Have you bought your candy yet? Halloween is practically here. Do you think Halloween related stocks may be tricks or treats? There are several stocks that may benefit from the holiday.

Watching scary movies is one of the popular activities of teenagers (and adults too) on Halloween, either in a theater or renting a DVD. Netflix (NFLX) took a huge dump after reporting earnings. That was scarier than watching Halloween I, Halloween II, and Halloween III. If you think the stock has hit bottom, you may want to take a closer look. The company has a substantial number of horror movies in its collection of titles. The stock currently trades at 14 times current earnings.

Lions Gate Entertainment (LGF), one of the top studios that produces scary movies, has made such films as American Psycho, Ginger Snaps, Route 666, The Devil's Rejects, House of the Dead 2, Saw VI, See No Evil, Hostel: Part II, My Bloody Valentine 3D and more. The company has a forward price to earnings ratio of 24.

The big beneficiaries of Halloween are the candy companies. Hershey Foods (HSY) is the large chocolate and confectionery company which is known for its Hershey Bars. The stock has a forward P/E of 18, and a yield of 2.4%.

Rocky Mountain Chocolate Factory (RMCF) is a very low cap Colorado based company which makes and markets chocolate and candy. The stock has a forward P/E of 12 and pays a generous yield of 4.5%.

Tootsie Roll Industries (TR) makes all kinds of candy for trick-or-treaters including Tootsie Rolls, Tootsie Roll Pops, Caramel Apple Pops, Charms, Blow-Pops, Blue Razz, Zip-A-Dee Pops, Cella's, Mason Dots, Mason Crows, Junior Mint, Charleston Chew, Sugar Daddys, and Sugar Babies. The stock has a forward P/E of 26 and a yield of 1.2%.

Halloween costumes and decorations are available at discount retailers such as Target (TGT) which has a forward P/E of 13, and a yield of 2.2%. Wal-Mart (WMT) is another major Halloween retailer. It has a forward P/E of 12, and a yield of 2.5%.

If you like interesting sectors of stocks, such as casino stocks, cloud computing stocks, birth control stocks, coffee stocks, and China stocks, check out

Disclosure: Author did not own any of the above at the time the article was written.


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