(BFM Bourse) – Last year we selected around twenty stocks which could replicate the performance of the famous bearded man if he were a conglomerate. How has this basket of securities evolved over a year?
And if Santa Claus were a listed multinational, in which stocks would it be necessary to invest to replicate the stock market performance of the “Santa Claus Company”? We asked ourselves this question a year ago and, with the help of several managers, we tried to answer it by defining a portfolio of around twenty stocks (21 exactly).
Its composition turned out to be quite varied: champagne (LVMH, Laurent Perrier, Vranken Pommery, Lanson BCC, which owns the brands Champagne Chanoine Frères and Champagne Lanson), toys (Mattel, Hasbro) video games (Nintendo, Electronics Arts) music (Spotify, Universal) and commerce (Amazon, Fnac Darty and Ceconomy, a German group that closely resembles Fnac Darty).
We also selected the chocolatiers Nesté and Lindt, Walt Disney and Netflix for streaming, the gym specialist Basic Fit (“for New Year’s resolutions”, explained Thierry Gautier, of GSD gestion), as well as Compagnie of the Alps and its high altitude resorts for winter sports. Without forgetting Coca-Cola, a company renowned for having fixed the imagery of Santa Claus.
But the company whose presence will surprise you the most is certainly Stora Enso. “When you think of Santa Claus as a company, Stora Enso immediately comes to mind. Like Santa Claus, it is Finnish, and it makes wood in Northern Europe. This company specializes in paper pulp and its derivatives. It’s THE company of Santa Claus,” explained Nicolas Descoqs, financial manager at Clartan Associés.
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Tech helped a lot
How has this basket of values evolved since last year? Did it do better or worse than the CAC 40?
Answer: since December 23, 2022 (last listed day before Christmas last year) these 21 securities have increased on average by 17.67%, a performance ultimately very close to that of the CAC 40 over the period (16.4% *) but therefore slightly higher.
This shows that our basket has a virtue: it is relatively diversified, which explains why it ultimately evolves in a manner comparable to a major index. Even if it is worth emphasizing the absence of stocks from major industries (energy, aeronautics, raw materials, defense, etc.) which carried the markets at the end of the year.
In detail, “tech” stocks have clearly carried this Santa Claus portfolio. Spotify gained 149%, thanks to good results driven by cost reductions, Amazon 79%, Netflix, which experienced record subscriber gains, 65.8% and Nintendo to a lesser extent took 23.7%. . Remember that tech stocks have benefited greatly this year from anticipations of the end of the US Federal Reserve’s key rate hikes, a market movement beneficial to growth stocks.
Conversely, several stocks are dragging down performance, notably Fnac Darty (-21.7%) which suffered from the repercussions of inflation on household spending which reduced purchases of discretionary goods. To a lesser extent, Hasbro (-12.7%) was affected by this trend, unlike its comparable Mattel (+11.8%). The action of the latter group was driven by an improvement in market sentiment towards the title, fueled by the success of the film adaptation of Barbie ($1.4 billion in revenue worldwide, according to Mojo Box Office), which boosted doll sales.
A good performance over 10 years
Coca Cola (-9.7%) and Nestlé (-10%) for their part may have suffered from market concerns about their products, with the rise of anti-obesity treatments from Novo Nordisk and Eli Lilly.
If you had invested 1,000 euros in each of these 21 stocks, your portfolio would amount to approximately 24,322 euros (excluding commissions and taxes), or a gain of 15.8%. The difference with stock market performance is explained by negative exchange rate effects, our basket including several stocks listed in the United States, in Zurich as well as one in Japan (Nintendo).
Over 10 years, the portfolio displays a performance of almost 197%, this time far superior to the CAC 40 (+80%). This outperformance can again be explained by the fairly dizzying leaps of tech groups. Netflix took more than 800%, Electronic Arts 501%, Amazon 675% and Nintendo 418%. We can also add LVMH which gained 533% even if the luxury group had a somewhat mixed year in 2023 on the stock market.
Assuming that you invested 1000 euros in each stock listed 10 years ago (17 in total, because Ceconomy, Basic Fit, Spotify and Universal were not present on the stock market at the time), your portfolio would reach almost 58,000 euros…
*Methodological note: for comparisons over 10 years, we used the price of a share in December 2013, and for one year we took the price of December 23, 2022. We took the same dates for the exchange rates euro-dollar, euro-Swiss franc and euro-yen.
For practical reasons, share prices and exchange rates for the year 2023 were decided on Thursday December 21 after the close of the European markets
Julien Marion – ©2023 BFM Bourse