Investing in toy stocks: a great lesson for kids


Investing in stocks can be kid's stuff. You can give your child an education about investing and put money aside for college at the same time.

Buy a stock whose products will be familiar to your child. Then help the youngster track the progress of that company and its investment value. The process from the product level to the company literature can be fun for the entire family.

Of course, while this is part of an educational process, don't buy stock of just any company that's recognizable to kids. Buy solid choices likely to appreciate in value.

Take toy-company stocks, for example. "In kids' terms, I have the 'funnest' stock group to follow, because I love to play with toys," said Jill Krutick, leisure products analyst with Salomon Brothers. "But I also focus on companies that are diversified, have global expansion and link onto the hottest product licenses."

Parents should help out. "Not only must you find a company kids relate to, but you must draw attention to the quarterly reports, the commercials and the products at the store," said John Rogers Jr., president of Ariel Capital Management.

Teach the child to invest for the long haul. "The goal must be long-term investing for a three- to five-year time period," said Sandra Shrewsbury, managing director with Piper Jaffray Inc.

Choose stocks that won't provide too bumpy a ride. "Established companies with growth potential are the way to go with kids, not cyclical companies that will move in and out of favor," said Raymond Urban, executive vice president with Duff & Phelps investment research.

Here are stock choices for youngsters that happen to be good for adults as well:

* Hasbro Inc., the world's largest toy maker and holder of exclusive licenses for action figures and products connected with the film "Jurassic Park," as well as "Batman" and "Aliens." Also features Barney the Purple Dinosaur plush toys. Diversified, with divisions such as Kenner, Parker Brothers and Milton Bradley. Favored by Krutick and Rogers.

* General Mills Inc., a food company with famous cereals like Cheerios, Wheaties and Lucky Charms, as well as products such as Yoplait yogurt. Also owns the Red Lobster and Olive Garden restaurant chains. Picked by Shrewsbury and Urban.

* Walt Disney Co., the creative theme-park and film giant that brought us Mickey Mouse and Aladdin. Likely to experience 20 percent annual growth. A selection of Shrewsbury and Urban.

* Russell Corp., the biggest maker of athletic wear, known to teen-agers and to major-leaguers who wear its apparel. Well-managed, the company is a long-term selection. Favored by Rogers.

* Mattel Inc., the powerful toy company that brought us Barbie and Hot Wheels. It continues to profit from Barbie, including the new Hollywood Hair version. A Krutick pick.

* Toys "R" Us Inc., the nation's largest toy specialty chain, enjoying strong growth overseas as other countries begin to catch up to the U.S. "toys per kid" ratio. Recommended by Shrewsbury and Urban.

* McDonald's Corp., the world's biggest restaurant chain. Expanding rapidly overseas. Growth has slowed a bit but should still turn in 12 percent annually. Chosen by Shrewsbury and Urban.

* Wm. Wrigley Jr. Co., whose gums, like Doublemint and Hubba Bubba, are famous. Could grow at a 10 percent annual rate as overseas markets expand. An Urban choice.

* Campbell Soup Co., a soup, spaghetti, frozen-food and juice company known to everyone in the United States and growing overseas. An Urban pick.

* PepsiCo Inc., a leader not only in beverages but also in snack foods, with its Frito-Lay. Restaurant holdings Pizza Hut, Taco Bell and KFC (Kentucky Fried Chicken) are experiencing international expansion. A Shrewsbury favorite.

* Coca-Cola Co., which features sure-fire brand-name recognition. It is likely to grow 16 percent annually as it brings that brand to the world. An Urban choice.

* Microsoft Corp., the premier software company and one whose products increasingly will be used by schoolchildren. Expect 22 percent annual growth. An Urban selection.

* Topps Co., a trading-card company that will be a survivor despite tough times for its industry. Trading cards for films "Jurassic Park" and "Last Action Hero" are its latest products. Favored by Krutick.

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