NASDAQ stock market displays at Times Square. By bfishadow on Flickr [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
With the holiday season rapidly approaching, investors might not be thinking all that much about their stock portfolios right now. Our contributors, though, believe that these seven stocks, which span a wide diversity of industries and market caps, are worth taking the time out of your busy holiday schedule to check out. Read on to find out which stocks they are hot on this month, and why they think they might be great additions to your portfolio.
Tyler Crowe: One stock that looks especially intriguing is rig owner Helmerich & Payne (HP 5.80%). The company leases rigs to producers and oil-services companies to drill wells. The decline in oil prices and drilling activity across the U.S. has weighed heavily on the stock over the past 18 months, but that may be the reason to buy shares today.
Steve Symington: CalAmp Corp. (CAMP -0.56%) stock skyrocketed more than 25% in the week following its impressive quarterly results in early October. But shares of the machine-to-machine communications specialist have gradually given back some of those gains since then, presenting opportunistic investors with a chance to pick up shares while we're still in the early pages of CalAmp's long-term growth story.
CalAmp is enjoying impressive growth from its core Wireless Datacom business, where revenue increased 23% year over year last quarter to $61.8 million. For that, CalAmp credited solid demand from asset tracking customers, and its strongest-ever quarter for fleet management product sales. Recurring subscription revenue also climbed to 15.9% of total sales, up from 15.6% in the prior quarter, demonstrating progress in building a more predictable, sustainable revenue stream.
Regarding longer-term initiatives, CalAmp management also confirmed that it's making "excellent" progress commercializing key intellectual property from the previous acquisition of insurance telematics company Crashboxx, and last month it announced a strategic seed investment in technology and insurance start-up SmartDriverClub to help foster this key growth market. Keep in mind that this also partially fulfills a previous promise to put to use $152 million in proceeds raised earlier this year through a convertible note offering pegged for exactly these kinds of transactions.
If CalAmp can keep riding these tailwinds and secure its central role as the Internet of Things gains steam -- and with shares still trading at an attractive 14.4 times next year's estimated earnings -- I think patient investors who buy CalAmp stock this month will be more than pleased with their decision.
Source: Las Vegas Sands.
Nike is a particularly interesting stock for December because the Dow component will report its fiscal second-quarter results later in the month. Investors expect that the strong dollar will continue to hold back Nike's sales growth from its typical double-digit percentage pace, but they're still optimistic that rising earnings will keep the stock on its upward path. For now, it seems as though there's enough room for both Nike and its smaller rivals to share in the rapid expansion in the industry among fitness-seeking customers. As long as that trend lasts, Nike should be able to keep making its impression as the longtime leader in athletic footwear and apparel.
George Budwell: The stock that's high on my list this month is Botox maker Allergan (AGN). Besides the fact that Allergan's stock is already trading at a 15% discount relative to the announced tender offer from Pfizer, I think this company is a compelling buy because it offers investors strong sales growth with limited downside risk.
Specifically, Allergan is expected to post a noteworthy 41% increase in annual sales in 2015, according to S&P Capital IQ. And the best part is that this incredible amount of growth is being generating by several products, including Botox, Restasis, Namenda XR, and Linzess, among others -- giving the company a well-diversified growth platform.
Looking ahead, Allergan is poised to divest its generic-drug unit to Teva Pharmaceutical Industries Ltd. in Q1 of 2016 and complete the merger with Pfizer sometime in Q3. While the divestiture of its generic-drug business is projected to cause total sales to slump to a small degree next year, Allergan's earnings are still expected grow by around 4% because of an overall streamlining of its operations.
Now, the merger agreement is obviously the elephant in the room. However, I think Allergan's core business should be strong enough to produce market-beating returns -- with or without the deal.
Tim Green: Shares of toymaker Mattel (MAT 1.43%) have tumbled over the past few years, with the stock down nearly 50% since the beginning of 2014. The company's brands, which include Barbie, Hot Wheels, and Fisher-Price, are well-known and time-tested, but sales have been slumping, and Mattel's net income over the past 12 months is about two-thirds lower than it was in 2013. According to The Wall Street Journal, Mattel has lost about 20% of its shelf space at the largest U.S. retailers because of its prolonged sales slump and dearth of big hits.
A major part of the problem for Mattel has been a company culture that stifled creativity. Bureaucracy, endless meetings, and decisions made with only the bottom line in mind have created a company unable to quickly adapt. As Mattel has struggled, privately held Lego has grown into a behemoth, and rival Hasbro has been scooping up market share, thanks in part to its toys based on Frozen and Star Wars.
Under a new CEO, Mattel is looking to turn itself around. The company is trying to get new products to market faster, with a renewed emphasis on creativity. One such effort is Hello Barbie, a talking version of the iconic doll that uses speech-recognition technology to converse with the user. The good news for Mattel is that global toy sales have been strong so far this year, growing by 7% through September, according to NPD. Mattel hasn't enjoyed the spoils of this growth so far, but the company is taking the necessary steps to right the ship. All of Mattel's problems are self-inflicted and fixable, and while a turnaround will take time, patient investors can take advantage of Mattel's depressed stock price in December.
