As we approach the holiday season, investors are not only gearing up for Christmas shopping but also looking for potential opportunities to grow their wealth by exploring Christmas stocks to invest in.
Christmas is not just a time for giving and receiving gifts but also when certain stocks tend to perform well due to increased consumer spending. The stock markets also experience a unique phenomenon known as the Santa Claus rally.
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What is a Santa Claus Rally?
It's a term used to describe a situation where the stock market experiences a surge in value during the last week of December and the first two trading days of the new year. This concept originated in the US markets. While the exact reasons behind this rally are debated, many attribute it to increased buying activity as investors aim to capitalize on year-end tax benefits (since the US follows a calendar year for taxation) and a general sense of optimism accompanying the holiday season.
In India, our stock markets are correlated to the US stock market, so it is not unusual to witness a Santa Claus Rally here too. In fact, over the past decade, India has consistently seen a positive upswing in the last two weeks of the year.
Stocks to Benefit From Christmas 2023
This blog will explore the top three stocks to benefit from Christmas 2023 and provide insights into why they might be attractive investments during the holiday season.
Shoppers Stop
Shoppers Stop Ltd. is India's leading retailer of fashion and beauty brands. As of December 31, 2022, it operates 271 stores across 50 cities, boasting a portfolio of over 800 brands. Shoppers Stop offers a wide range of clothing, beauty items, and home products. They feature both private and trusted brands.
Shoppers Stop has 9.5 million first-citizen members and partnerships with 800+ brands. The company invested approximately ₹90 crore in capital expenditure for expansions in 2023.
The company has delivered good profit growth of 26.3% CAGR over the last five years.
Easy Trip Planners Ltd
The company operates under the flagship brand "Ease My Trip". It offers travel-related products and services like airline tickets, hotels, holiday packages, rail and bus tickets, taxis, and additional value-added services such as travel insurance and visa processing.
It is India's second-largest and uniquely profitable online travel portal. It provides comprehensive travel solutions, including airline tickets, hotels, holiday packages, rail, and bus tickets. EMT's strategic moves include acquisitions like Spree Hospitality and YoloBus, as well as partnerships with Flybig, SpiceJet, and JustDial to diversify its presence.
In FY22, the company expanded internationally into the Philippines, Thailand, and the USA and also signed an MOU with Saudi Tourism.
They have a return on equity of 48.7% over the last three years.
Titan Company Ltd
Titan Company Ltd is a renowned Indian lifestyle conglomerate that has solidified its position as a leader in the watches, jewellery, and eyewear sectors. Established in 1984, it emerged as a collaborative effort between the TATA Group and Tamilnadu Industrial Development Corporation.
In its jewelry division, which contributes to 89% of its revenues, Titan is India's largest jewellery retailer. It has manufacturing facilities in Hosur, Pantnagar, and Sikkim. It markets jewellery under well-known brands like Tanishq, Zoya, Mia, and Caratlane. These divisions have a robust retail presence of approximately 580 stores. It also maintains majority ownership of CaratLane with a 72.3% economic interest.
With an eye on international expansion, Titan established a subsidiary in the USA in FY22. The company focuses on sustaining its competitive advantage in domestic and international markets while expanding its retail presence and brand.
They have delivered good profit growth of 23.9% CAGR over the last five years and have maintained a healthy dividend payout of 31.6%
Conclusion
It is essential to conduct thorough research before you head out to make any investments. The holiday season can be volatile, and it is essential to have a well-thought strategy in place. With careful planning and smarter investment choices, you can potentially unwrap profitable opportunities in the stock market this Christmas.
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