Did Valentine's Day Heat Up Your Penny Stocks?

by John Whitefoot - Date: 2007-03-14 - Word Count: 582 Share This!

Some astute penny stock investors look on the front page of the daily newspaper to see what kinds of stocks they should be investigating in. Marketing and speculation are after all one of the engines that help propel the markets on a daily basis.

Still, there are other penny stock investors who glance at the calendar; taking note of upcoming holidays. Some stocks operate more cyclically than others. Meaning, there are some penny stocks that perform better at different times of the year.

Holidays can also help you look for companies you may not encounter on a regular basis.

For example, this past Wednesday was Valentine's Day. While your immortal beloved may forgive you for neglecting Robby Burns Day or even St. Patrick's Day...Valentine's Day is (probably) a different matter altogether.

Even if you don't have (or want) someone to spend Valentine's Day with, it's a marketing bonanza that should make most investors wake up and smell the roses. And maybe uncover neglected penny stocks that are directly impacted by the holiday.

Valentine's Day remains the nation's third-biggest occasion for spending, behind only Christmas and the back-to-school season, according to the National Retail Federation.

This year, the average consumer spent $119.67 on Valentine's Day, up from $100.89 last year. With six of every 10 consumers celebrating the holiday, their total outlay on Valentine's Day is expected to reach $16.9 billion.

Greeting card sales have increased over the past decade, which means that Valentine's Day--already America's second-largest holiday for greeting cards, trailing only Christmas--should be a real boom.

The U.S. Greeting Cards Association estimates that Americans sent out 190 million paper cards this past Valentine's Day. That number doesn't even include those given out by children at school.

If investing in cards leaves you cold, you could look into flowers. According to the California Cut Flower Commission some 189 million rose stems were sold this past Valentine's Day. In fact, Valentine's Day is the number one floral market holiday, capturing 35% of holiday transactions and 34% of dollar volume.

Here's another reason why penny stock investors should check the calendar. The day of the week a holiday falls traditionally determines the amount of business shops will enjoy.

If it falls on Friday and Saturday, people tend to go out to eat more, rather than buy chocolates. Falling on Wednesday this year -- smack in the middle of the week -- Valentine's Day 2007 should prove delightful for chocolate emporiums.

In February, jewelry stores in the United States will sell over $2.5 billion worth of merchandise. According to the Chocolate Manufacturers' Association, more than 36 million heart-shaped boxes of chocolate were sold by Valentine's Day.

The point of all these statistics is to illustrate just how lucrative the holidays can be. While a couple of greeting card companies may have a strong-hold on the North American market, there are other publicly traded small-cap card companies out there.

A strong holiday season may only be seen as a blip to mid or large-cap stocks, but one strong quarter can significantly boost the bottom line of a penny stock.

Look close enough and you'll find that there are a number of specialty retail penny stocks waiting to be discovered; companies that sell flowers, cards, party favors, perfume, and jewelry.

And if you happened to have forgotten Valentine's Day this year, just say that you like to celebrate that special day in the Japanese tradition. In Japan, men are not expected to give chocolates or cards on Valentine's Day, and in fact do not. Valentine's Day is a day where women give chocolate to men.

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