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4 Stocks to Watch as Demand for Animation Collectibles Grows

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·4 min read
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Collectibles, whether diecast car models or action figures, have always had a wide appeal. Certain collectors also look to sell some of their collections, usually items which are rare and hold value to enthusiasts. Interestingly, with the prolific rise of the entertainment industry, the demand for animation collectibles has witnessed an upswing.

Markedly, people have been demanding animation collectibles as part of their favorite movie or animated show’s legacy and appeal. In fact, the meteoric rise of franchises, especially comic book, and other animated movies and shows, has increased the appeal of such collectibles. Interestingly, a report by Technavio, as cited in a Business Wire article, stated that licensed merchandise has emerged from simply being a source of revenue for license providers to a major form of marketing and brand promotion.

Nowadays, even before a movie is released, licensed merchandise are launched to increase the hype surrounding the movie. At times, the merchandise also reveals important details about the upcoming movie, thereby heightening the movie’s anticipation.

Moreover, the Business Wire article stated that the rise of e-commerce has been instrumental in boosting demand for collectibles. This is because, with the help of e-commerce, licensors are now able to globally expand their portfolios, cited the article. The article further stated that global players are hiring licensing agents to “enter a new market due to the diversity of merchandise popularity from one area to another.”

Reflective of the widening appeal that animation collectibles are witnessing, it is no surprise that the animation collectibles market is poised to grow. Notably, per another report by Technavio, the global animation collectibles market is set to witness a CAGR of 4.11% from 2021 to 2025. Moreover, the report stated that 32% of the animation collectibles market’s growth, during the forecast period, is set to originate from North America.

4 Stocks to Watch Out For

The animation collectibles market looks ready to witness growth going forward, thanks to the widening appeal among collectors. Moreover, several companies are utilizing this appeal as a way of promoting their movies and shows. Hence, this seems like an opportune moment to take a look at companies that can make the most of this potential. Notably, we have selected four such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hasbro, Inc.’s HAS U.S. and Canada segment markets and sells action figures, arts and crafts, and creative play products, and so on, while its Entertainment, Licensing and Digital segment engages in consumer products licensing, digital gaming, Hasbro legacy movie, and television entertainment operations. The company sells its products through Hasbro PULSE e-commerce website, and to wholesalers, distributors, chain stores, and so on. Hasbro currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 4.6% over the past 90 days. The company’s expected earnings growth rate for the current year is 20.6%.

Funko, Inc. FNKO designs, sources, and distributes licensed pop culture products and offers vinyl, blind-packed miniature, and action figures; plush products; accessories, and so on. The company sells its products to specialty retailers, mass-market retailers, e-commerce sites, as well as through its e-commerce business, among others. Funko currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has moved 18.5% north over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.

Mattel, Inc. MAT provides action figures, building sets, and games under the Masters of the Universe, MEGA, UNO, Toy Story, Jurassic World, WWE, and Star Wars brands; and licensor partner brands, including Disney, NBCUniversal, WWE, Microsoft, Nickelodeon, Warner Bros, and Sanrio. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings has risen 20% over the past 90 days. The company’s expected earnings growth rate for the current year is 66.7%.

JAKKS Pacific, Inc. JAKK offers action figures and accessories, such as licensed characters; toy vehicles and accessories, among others. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its next-year earnings has risen more than 100% over the past 90 days. The company’s expected earnings growth rate for the current year is 53.5%.

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