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Pandemic Pushing Toy Sales: 3 Stocks to Watch

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The coronavirus pandemic has been keeping most people at home, especially children who have no option of entertainment. With parks and other outdoor entertainment zones closed, they have mostly been engaging in indoor games. This has seen a massive jump in toy sales over the few months.

Toymakers, needless to say, have been one of the biggest beneficiaries of the coronavirus pandemic. And experts predict that toy sales will only rise in the days to come.

Toy Sales See Robust Growth

The holiday season every year sees a spike in toy sales. This year hasn’t any different. However, the difference this year has been that sales have been higher all throughout. According to a report by the NPD Group, the U.S. toy industry grew 19% in the first three quarters of the years.

Growth was mainly driven by higher sales of outdoor games, puzzles and building sets. The best selling toys in the first three quarters of 2020 includes  L.O.L. Surprise!, Barbie, Star Wars, Marvel Universe, Pokémon, Disney Frozen, Nerf, Hot Wheels, Little Tikes, and Paw Patrol. Besides, the top 10 best-selling properties combined grew 29% from 2019.

Pandemic Helping Toy Sales

Toymakers are of the opinion that the pandemic played a major role in pushing up demand and eventually the sales of toys. The pandemic resulted in a shutdown of everything including entertainment zones and parks, which saw children keeping themselves engaged with toys.

Tech toys too have been popular this year. Much like videogame makers such as Nintendo Co. (NTDOY - Free Report) and Activision Blizzard, Inc. (ATVI - Free Report) , which have seen sales soar during the pandemic, toymakers too have been taking full advantage of the situation. Although a COVID-19 vaccine has finally been rolled out, it will still take some time for the situation to normalize. Hence it is likely that parents will prefer keeping their children indoors. This will only further help in giving a boost to toy sales.

Stocks to Watch

With Christmas approaching and the pandemic still keeping kids indoors, toy sales are only set to soar. Here are three stocks from the toy industry that are likely to benefit ahead.

JAKKS Pacific, Inc. (JAKK - Free Report) is a multi-brand company that has been designing and marketing a broad range of toys and consumer products since 1995.

The company’s expected earnings growth rate for the current year is 31.8%. Shares of this Zacks Rank #2 (Buy) have jumped 23.4% over the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Mattel, Inc. (MAT - Free Report) is the world’s largest manufacturer of toys. The company’s products are sold directly to retailers and wholesalers in most European, Latin American and Asian countries as well as in Australia, Canada and New Zealand through the Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands, and Construction and Arts & Crafts Brands.

The company’s expected earnings growth rate for next year is 32.4%. Its shares have jumped 55.5% over the past three months. Mattel has a Zacks Rank #2.

Hasbro, Inc. (HAS - Free Report) is engaged in the design, manufacture and marketing of games and toys. The company, founded in 1923, offers traditional, high-tech and digital toys, games and licensed products under various well-known brands.

The company’s expected earnings growth rate for next year is 21.5%. Its shares have jumped 19.2% over the past three months. Hasbro has a Zacks Rank #3 (Hold).

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