With Halloween just around the corner, I thought it would be fun to look at 3 Halloween related stocks. Think seasonality. 

With this year’s Halloween expected to be back to ‘normal’ after two years, there are a lot of analysts expecting a Halloween boom.

According to Numerator’s 2022 holiday preview, 78% of Americans look forward to celebrating this year’s Halloween, a significant increase from 2021 — 65% and 2020 — 58%. The implication is that the average expected Halloween spending might likely top 2021, which was a record $102.74 per person.

I will be avoiding the obvious stocks like Wal Mart and Target and other big department stores which sell candy, costumes and decorations. Sure, they could get a boost from increased Halloween spending this year, but other factors are likely to drive their prices. Most are value stocks.

I want to focus on stocks with a Halloween flavor, and will play off the seasonality theme. Here are three stocks which will perform better during and after Halloween. Let’s start from cheap to expensive.

Party City (PRTY)

Party City continues to be my preferred swing trade every Halloween. One can understand why this company would see a benefit from the economic activities which go with Halloween.

In fact, Party City plans to hire roughly 20,000 seasonal team members to staff its 150 Halloween City pop-up stores and 750 Party City stores. Pop-up retails make up about 35% of the annual Halloween market.

The stock has been holding above the major psychological $1.00 zone. It has had some nice runups from this support. I have drawn out a trendline which I think is pretty valid. A new uptrend is beginning. I do expect another wave up.

Note that earnings are upcoming. This is likely the catalyst for a higher move backed by Halloween earnings. If you scroll back and look at prior Octobers, Party City historically performs well in the month of October and a few weeks post Halloween.

 

Tootsie Roll (TR)

Tootsie Roll is an interesting one. A candy manufacturer that creates popular brands such as Tootsie Rolls, Andes Chocolates, Charms, Dubble Bubble, Blow-Pops, Dots, Junior Mints, Sugar Daddy and Sugar Babies. Tootsie Rolls tend to be found in trick-or-treaters candy haul. Halloween time is a very important time for Tootsie Roll’s business.

The interesting part? Tootsie Roll stock pays a dividend. In fact, Tootsie Roll is one of only 20 companies that have grown dividends yearly for the past half-century. The current annual dividend yield is 0.90%.

And the technicals just make the stock look even better.

The Halloween run up sure is under way. The stock should be announcing earnings sometime before the 31st of October. Major breakout just occurred with a close above the $38 zone. And the higher low is being formed with current price action showing price take out recent highs.

Earnings could set a major technical break for the stock, as when I switch to a line chart, Tootsie Roll is actually testing resistance at $40.40. I did this because some of you may remember that this stock popped up to $55.59 during a WallStreet Bets short squeeze.

 

The Hershey Company (HSY)

Another mainstay in trick-or-treaters candy haul… and in our pantries regardless of Halloween. Hershey’s is a behemoth in the candy space with a current market cap of $49 billion. It is the leading confectionery manufacturer in the US, controlling around 46% of the domestic chocolate space. The company includes over 100 brands and some well known candy and chocolate brands are  Kit Kat, Kisses and Reese’s Peanut Butter Cups.

The company pays an annual dividend yield of 1.73%.

But take a look at this stock chart:

While stock markets have been turmoil, and major names crashing, Hershey’ stock has not been affected. Briefly for one day the stock fell 7% in May, but the dip was bought up quickly.

I guess people do turn to chocolate and candy during times of turmoil. The real comfort food. I say this because I remember a trader telling me that if the world is about to end, he would buy confectionary stocks. An interesting way to look at things.

Hershey’s will be releasing earnings in the first two weeks of November, and the market expects a good number. I say this because it would explain why the stock is making NEW RECORD ALL TIME HIGHS. Been awhile since I typed those words out in my Market Moment articles. A major breakout which likely sees follow through given earnings and astute investors considering the Halloween seasonality play.