Canadian investors are seeing some recovery in the TSX as the temperature drops and the holiday season brings shoppers to retail and online stores. December is a big month for shoppers and stores. But it is also a good month for those making it happen. While Santa’s elves are busy at the Noth Pole preparing for Christmas Eve, three companies are busy working on their seasonal sales.
3 TSX stocks poised for a big December 2023
The Christmas and holiday season is busy for many companies. However, this seasonality was tepid in the last three years as the global economy went through a roller coaster ride of pandemic, recovery, and inflation. After a dip, rise, and dip, December 2023 is the time for another rally. And the first 10 days of the month are proof of the rally.
Three TSX stocks are seeing a seasonal rally that could last till Christmas and beyond.
Spin Master stock
If you are wrapping a PAW Patrol toy or Etch-a-Sketch for your little one, so are thousands of parents worldwide. The elf behind these toys is Spin Master (TSX: TOY). Its toy portfolio comprises puzzles, dolls, and interactive, outdoor and digital games. While toys make up 85% of its revenue, the company also earns money from generating entertainment content for children. Its third-quarter revenue from the entertainment segment surged 71.4% as PAW Patrol: The Mighty Movie Distribution earned $15.6 million in revenue.
Looking at the stock price performance of Spin Master, its growth has been tepid, with sharp movements of growth and slump. In a normal year, the toymaker’s share price jumps 8–14% during December. However, the Christmas seasons of 2020 and 2022 were not that good for the stock due to the pandemic and inflation. However, the holiday fever is picking up. The stock surged 6% between December 5 and 10, 2023. It is time to ride on the momentum by buying the stock in the early rally and selling it at its month-end peak. TOY stock is trading below $35. It has the potential to grow 9–12% this month.
Even if you miss the holiday season peak, there are a few seasonal peaks when the stock crosses $40. This year, it did not cross the bullish mark as consumer demand fell due to rising interest rates. But with the rate hike close to its end, consumer discretionary demand could pick up and give you the $40 price on economic recovery.
Nuvei stock
The shopping fever has given the payments platform Nuvei’s (TSX: NVEI) stock new life. The stock fell 67% from its May peak as it fell prey to short-seller Spruce Point Capital. However, e-commerce sales recovery in November drove the stock up 48.5% in November.
While e-commerce giant Shopify’s share price surge slowed in December after a 51% jump in November, Nuvei’s rally continued. The payments platform stock surged 13.5% in the first 10 days of December and has the potential to grow further as the stock is not yet oversold.
Descartes
Moving further into the supply chain, logistics solutions provider Descartes Systems (TSX: DSG) is also having a gala time as e-commerce momentum picks up. This supply chain solutions provider has its hands full with e-commerce deliveries, inventory management, and other solutions. Many companies upgrade their Descartes subscriptions to ensure timely delivery of orders. This momentum was visible in November when the stock surged 9.9% and continued to grow 2.3% in December.
Investor tip
While Spin Master is a momentum stock, Nuvei is a high-growth stock that could surge significantly in the long term. Descartes is a resilient growth stock you can buy and hold for decades to earn a 15–18% compounded annual growth rate. This set of three stocks could give you seasonal cheers in a normal economic scenario.
