(BFM Bourse) – With the help of a few managers, BFM Bourse has selected securities that could replicate the performance of Santa Claus, if the famous bearded man were a conglomerate.
Christmas literally arrives on Sunday, accompanied by the famous Santa Claus, a timeless icon supposed to bring many gifts to (big) good children.
For the markets, the central banks have somewhat played spoilsport with their restrictive communications. To the point of weakening the famous “Santa Claus rally” since tradition has it that the month of December is beneficial to the equity markets.
What if Santa Claus was a multinational? In which companies should we invest to approach the “performance” of this gigantic conglomerate?
BFM Bourse has selected stocks also with the help of the opinion of a few managers. While you certainly know most of them, others are a little less obvious.
Stora Enso, THE value of Santa Claus
“When you think of Santa Claus as a company, Stora Enso immediately comes to mind. Like Santa Claus, she is Finnish, and she makes wood in Northern Europe. This company specializes in pulp and its derivatives. It is THE company of Santa Claus”, first of all advances Nicolas Descoqs, financial manager at Clartan Associés
The financial intermediary adds that this company has a park of forests which “in area is equivalent to half the area of Switzerland”. And a turnover of more than 10 billion euros achieved last year…
“Investing in the values that would be linked to a company managed by Santa Claus refers to the notion of pleasure and leisure, all of course on goods and services for the family”, underlines Frédéric Rozier, manager for Mirabaud France.
“We can think of titles like Nintendo, Walt Disney or even Netflix. But also confectionery and chocolate like Nestlé or Lindt,” he says.
Champagne, video games and…doliprane
Beyond sweets, “We can think of groups specializing in champagne to consume or to offer! With LVMH, Laurent Perrier, Vranken Pommery and Lanson-BCC (which owns the brands Champagne Chanoine Frères and Champagne Lanson)”, proposes Thierry Gautier, from GSD management.
“In the ‘hood’ of values that could be part of the ‘Santa Claus company’, there could be groups listed in video games such as Electronic Arts or Nintendo. Ubisoft should be taken with more caution given the “recent operation of the Guillemot family on its personal holding”, also suggests Thierry Gautier.
The manager also mentions two companies that many French people have asked for their gifts, namely Amazon and Fnac Darty which “are essential for having your purchases delivered or collected”. To leave known names a little, let us also mention in the same sector the German Ceconomy, specialized in consumer electronics and non-food distribution, via the Media Markt and Saturn brands.
Still in this selection, the managers surveyed also propose to add a little music, with Universal Music Group, floated on the Amsterdam Stock Exchange last year by its former parent company Vivendi, which still owns 10% of the capital. Recall that the Swedish Spotify is also listed on the New York Stock Exchange.
Of course, let’s not forget the toy specialists Hasbro, famous for Monopoly and Scrabble, and Mattel, known for Barbie dolls, both present on the Nasdaq. The Danish Lego is not listed and is owned by the founding Kristiansen family.
“For good New Year’s resolutions, Basic Fit is a good choice”, also points out Thierry Gautier. This Dutch gym franchise is listed in Amsterdam and in 2019 generated more than 500 million euros in revenue.
“For winter leisure, we can think of the Compagnie des Alpes”, suggests Nicolas Descoqs. Can we add Coca-Cola, a company renowned for having fixed the imagery of Santa Claus? “Why not? After all, Santa Claus is them historically,” replies the manager.
On the other hand, we have chosen to exclude FDJ from our selection, because we have a hard time imagining Santa Claus with an activity that largely excludes children (in some cases they have the right to participate in the lottery according to service-public.fr) .
Last proposal, from Thierry Gautier: “why not add Sanofi and its Doliprane to reduce post-New Year’s Eve excesses?”.
BFM Bourse thus wishes you a good Christmas Eve, but in moderation.
A “Santa Claus index” in sharp fall over one year
For fun we have built a “Santa Claus index” or rather a portfolio assuming that an investor had invested around 1,000 euros in each stock mentioned in this article (Sanofi, Vivendi and Ubisoft excepted).
We arrive at a remarkable performance over 10 years, with a portfolio whose value has been multiplied by 4.3. On the other hand, over one year, the portfolio fell by more than 30%, weighed down by the plunge in technology stocks such as Netflix, Amazon, Spotify and Nintendo.
Note on methodology: for the variation over 10 years, we have removed Ceconomy, Spotify, Fnac Darty, Basic Fit and Universal Music, which were not listed in 2012. We have integrated them over one year assuming an initial investment of 1,000 euros in each security, on December 24, 2021.
We have taken as reference December 2012, December 24, 2021 and December 20, 2022 to make our comparisons, whether for company prices but also for the dollar/euro, Swiss franc/euro and yen/euro exchange rates.
Julien Marion – ©2022 BFM Bourse