Christmas Stocking Stocks: A Festive Season Investment Guide

Holiday spending is more than a festive tradition, it’s an investment opportunity. Shaun Krom, CIO of Easy Asset Management, highlights stocks like Mr Price and Lewis Group poised to benefit this season.

• Stocks like Mr Price, Lewis Group, and Southern Sun are set to benefit from increased festive spending as consumer confidence reaches its highest point since 2019.
• U.S. giants like Walmart and Deckers Outdoor Corporation are thriving, with year-to-date performances of 74% and 72% respectively.
• EasyAssetManagement’s actively managed ETFs and bundles include these holiday performers, delivering impressive returns like 70% YTD for their Global Equity General CIS portfolio.
  

Consumer Confidence and Election Influence

South African consumer confidence experienced a steady rise in 2024, driven by a combination of economic stability, political developments, monetary policy adjustments, and the implementation of the two-pot retirement system. A significant reduction in load-shedding improved business operations and sentiment, while a stronger rand and substantial fuel price cuts enhanced consumers’ purchasing power. The formation of a government of national unity after the May 29 elections further bolstered optimism about the country’s future economic direction.

The FNB/BER Consumer Confidence Index (CCI) reflected this upward trend. In the first quarter, the CCI improved to -15 points from -17, as reduced load-shedding and slowing food inflation began to ease financial pressures, despite concerns over job losses and rising fuel costs. By the second quarter, confidence increased further to -12 points, buoyed by stable electricity supply and significant fuel price cuts, particularly benefiting low- and middle-income consumers. In the third quarter, confidence reached -5 points, the highest since 2019, supported by inflation moderation, expectations of interest rate cuts, and liquidity injections from the two-pot retirement system, implemented on September 1. The last time SA consumer confidence was this high was in 2019.

South African Companies

1. Mr Price Group (JSE: MRP)
   Mr Price Group is a leading value-focused retailer in South Africa, specializing in affordable clothing, homeware, and sports goods. Known for its budget-friendly offerings, the company appeals to middle-income and budget-conscious consumers. Its stores are a popular destination for families looking to buy gifts, festive outfits, or home décor on a tight budget. The retailer’s strong brand equity and broad product range make it a preferred choice for holiday shopping.
   During the Christmas season, Mr Price benefits from an uptick in discretionary spending, particularly on apparel and seasonal items like party wear and home decorations.

4. Lewis Group (JSE: LEW)
   
   Lewis Group operates as a furniture and appliance retailer, catering to South African households looking to invest in durable goods. Known for its extensive range of furniture, electronics, and home appliances, the company attracts customers during the festive season.
   
5. Southern Sun (JSE: SSU)
   
   Southern Sun is a leading player in South Africa’s hospitality sector, offering a wide range of hotels, resorts, and conference facilities. With destinations spanning urban centres and coastal getaways, the group caters to both local and international travellers seeking leisure or business accommodations. The festive season sees a surge in bookings as travellers plan their holiday escapes.
   
   Its ability to cater to diverse budgets, from affordable accommodations to high-end offerings, ensures it appeals to a wide customer base during the holiday rush.
   
   
6. Truworths International (JSE: TRU)
   
   Truworths International is a fashion retailer with operations in South Africa and the UK. Truworths is a staple for holiday shoppers seeking to refresh their wardrobes or buy gifts for loved ones. The retailer’s focus on credit sales also makes it an attractive option for middle-income consumers who may rely on financing for non-essential purchases.
   
   However, unlike Mr Price, Truworths has a large exposure to the UK so you can capture exposure to UK holiday shopping by investing in this company
   

U.S. Companies

1. On Holding AG (NYSE: ONON)
   
   On Holding AG, a Swiss sportswear company, is known for its innovative running shoes and athletic apparel. Its products are highly regarded for their unique design and performance, making the brand popular among fitness enthusiasts and casual wearers alike. The company’s rapid growth in markets like the U.S. reflects its strong brand appeal and effective marketing strategies.
   Christmas is a peak season for On Holding, as its products are often gifted to runners, athletes, and those embracing an active lifestyle. The combination of functional design and aesthetic appeal makes its shoes a standout choice for gift-givers looking for practical yet stylish options. Holiday discounts and promotional campaigns further drive sales, cementing its position as a top pick for festive shoppers.
   
   On Holdings shares are up 114% ytd, compare this to Nike which is down -27%. On is eating Nike’s lunch.
   
   
2. Deckers Outdoor Corporation (NYSE: DECK)
   
   Deckers Outdoor Corporation owns several globally recognized brands, including UGG and HOKA. UGG boots are synonymous with cozy winter fashion, while HOKA running shoes cater to performance-driven consumers. This dual brand strategy enables Deckers to appeal to diverse consumer segments, from fashion-forward individuals to serious athletes.
   The Christmas season is pivotal for Deckers, as UGG products are a staple in winter wardrobes and a popular choice for gifting. Simultaneously, HOKA’s focus on performance footwear ensures the brand attracts health-conscious shoppers during the New Year fitness resolution period. Deckers’ ability to balance fashion and functionality positions it as a strong performer during the holiday season. Deckers is up 72% year to date.
   
   
3. Walmart Inc. (NYSE: WMT)
   Walmart, the retail giant, offers an unparalleled range of products across categories like groceries, electronics, toys, and clothing. Its vast network of stores and robust online presence make it a one-stop shop for holiday preparations, from gift buying to hosting Christmas feasts. Walmart’s reputation for competitive pricing and convenience drives consistent foot traffic during the festive season.
   
   Christmas is a critical period for Walmart, as consumers flock to its stores for Black Friday deals and holiday specials. Its ability to cater to a wide audience, from budget-conscious shoppers to premium customers, ensures strong seasonal sales. Walmart also benefits from its growing e-commerce platform, which captures digital shoppers seeking convenience during the busy holiday period. Walmart is up 74% ytd.

Easy Asset Management

All of the above stocks are held by EasyAssetManagement in our bundles and actively managed ETFs. It is important to bear in mind to not only invest in a company for it’s holiday season potential but it’s long term performance. EAM manages the current top performing Global – Equity – General CIS portfolio, with an approximate YTD return of 70%, as well as the second best performing CIS in the South Africa – Multi Asset – High Equity (more commonly referred to as Balanced Funds). The EasyETFs AI World AMETF that is managed by EAM has delivered an approximate 20% return to investors since listing little over a month ago.




Dislcaimer:
The data above was taken between 1 January 2024 and 28 November 2024. This information is intended solely to provide insight into client behaviour on the EasyEquities platform and is not a recommendation or indication that these behaviours are suitable for you. Always consider your personal circumstances, financial needs, and objectives before making any investment decisions. All investments carry risk, and past performance is not indicative of future performance.

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