The Twelve Stocks of Christmas: Spin Master

Spin Master's Hatchimals

We’re pleased to present the second entry in The Twelve Stocks of Christmas, a focus on 12 holiday-related stocks that you can invest in right now. While these stocks are available to purchase year-round by anyone, they’re currently receiving more attention due to their products’ popularity during the holiday season.

Spin Master makes toys, and lots of them. For over two decades, they sold toys like Air Hogs, Kinetic Sand, and the lovable Little Charmers to children around the world. Earlier this year, they bought the rights to make the popular Etch A Sketch toy. They’re not as big as Hasbro or Mattel, but they do well enough to be known as a leading toy maker.

Now, the Toronto-based company is in a position that every toy manufacturer wants to be in: they’re the proud makers of Hatchimals, the most popular holiday toy on the planet. These $60 toys are flying off the shelves, to the point where the only way to buy them before Christmas is on the secondary market.

The demand for Hatchimals also had a positive effect on Spin Master’s stock ($TOY.CA), which hit an all-time high in late November. But should you invest in the rising toy company? Let’s find out.

Spin Master was founded in 1994, but rose to prominence in 1998 with their Air Hogs product line.

Air Hogs
Wikimedia Commons

Remember these? They used to advertise them all the time on Nickelodeon and Cartoon Network.

Since then, Spin Master launched several other brands and Spin Master Entertainment, a media company.

PAW Patrol
Flickr/Televisione Streaming

Spin Master Entertainment creates shows and characters like PAW Patrol, which Spin Master (the toy company) then turns into toys. The entertainment division does this for several other properties, including Bakugan Battle Brawlers, a property they don’t entirely own but do make toys for.

Spin Master recently released Hatchimals, which quickly became the toy of the holiday season.

Demand for Spin Master’s popular toy way outstripped supply, and the company will likely not be able to get more Hatchimals into homes until after the holiday season. Until then, the slightest rumor of a store carrying a Hatchimal or two is leading parents to drop what they’re doing and check the store’s stock in droves.

Spin Master went public last year, and you can buy their stock on two different markets.

The company trades on the Toronto Stock Exchange as $TOY, as well as the over-the-counter exchange as $SNMSF. Their stock has been up since the beginning of the year, though it went down a bit when investors realized the company wouldn’t meet the crazy demand for Hatchimals.

Should you invest in Spin Master? The company clearly sells a whole lot more than just Hatchimals, as proven by their existing brands, twenty-plus years in business, and how their stock performed before Hatchimals was a thing. The company’s stock is a fairly new addition to public exchanges, but if you think they have a bright outlook and could recreate their Hatchimals success in the future, consider researching the company’s financial results before you pull the trigger.

After all, investing in the company is a whole lot easier than, say, tracking down and buying a bunch of Hatchimals.