In this segment from MarketFoolery, host Chris Hill and Motley Fool Asset Management's Bill Barker answer a listener's question about where the current smart investments are in the fun-for-kids space. And their first suggestion may be best: Check with some actual kids. Nonetheless, they do have some stocks to recommend, and also some stocks to avoid.
A full transcript follows the video.
This video was recorded on Aug. 27, 2018.
Chis Hill: Question from Roy in Tel Aviv. "What are the best stocks to watch for in the entertainment for children segment?" It's a great question. We get variations of investing for children questions. I guess one of the thoughts that pops to mind when I get a question like this is, if you're wondering, "What should I watch when it comes to entertainment for children?" One way to go is, watch, what entertains your children? What are your children using? What is popular among them? That may be at least one way to get ideas. It doesn't mean, necessarily, rush out and buy shares of that thing. But, what becomes popular with your children and their friends is certainly a good place to start.
Bill Barker: Yeah, it helps frame the question. I suppose one of the answers I would look at is -- disclosure here that we have Hasbro in some of our funds -- don't invest in Mattel.
Hill: [laughs] I'm glad you led with the disclosure!
Barker: Well, Mattel has really gone the other way --
Hill: They really have.
Barker: -- from Hasbro. These were roughly equals not that long ago, and they are not today. Mattel is still the maker of many fine and well-known brands that entertain children today, in some ways just as they entertained them 40 years ago. But they are not a well-run company and they have not been making the right steps. They have suffered with the close of Toys R Us. Hasbro has, too, but to a much lesser degree, and is much better-positioned because of the steps they have made -- getting more of their names into mobile gaming and online, and just being a better-run company. Disclosure, there's an invested interest in that, in terms of our fund.
But, those are entertainment stocks for kids. Not in the visual entertainment so much. I think "Don't invest in Mattel" is my first thought about that. People, for many years, would have, in terms of getting their kids interested in a stock, get something they know, something they loved from a young age. They know the Mattel brands and would have done this. And unfortunately, they would not have done as well as if they had invested in Disney. Or, just, "You know what entertains my kid? My iPhone." That's what a lot of parents do to entertain their kids at a very young age now, when they want a few minutes of quiet -- hand over the phone or iPad, or something like that. I think those qualify, as well, as being some of the companies that most are integrated with entertaining kids.