While the holiday season is over, the final data will take weeks to compile. Early information coming in indicates that consumers remained strong, and spending held up well.
That’s good news for a number of companies, such as retailers. They have been laggards this year amid fears of a massive slowdown in consumer spending. Companies that supply retailers have also been underperforming, and may get a final boost in the months ahead as the final holiday sales data comes in.
One potential winner is Mattel (MAT). The toymaker has only returned half as much as the S&P 500 this year. However, it reports that the success of the Barbie movie has translated into increased toy sales this holiday season.
That could help shares continue even higher into the spring. Mattel’s revenue is up 9 percent over the last 12 months, and a quarter of strong consumer spending on toys could improve those returns even further.
Action to take: Shares have been in a narrow range for the past few weeks, missing out on the holiday rally that’s moved the overall market higher.
That could change in the coming months, leading to low double-digit returns for shares shortly, no matter what the rest of the market does. Currently, Mattel does not pay a dividend.
For traders, the April 2024 $20 calls, last going for about $1.20, could see mid-double-digit returns or better depending on the final sales data and how the stock moves in response.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.