NEW YORK (TheStreet) -- If you think Christmas sales are starting earlier every year, it's not just your imagination. The reality is that a persistently weak consumer spending environment has weighed on many retailers across 2010. Their last hope is for one big push to the finish line that coincides with the holiday shopping season.
Some investors are convinced that this year is going to be a Christmas to remember. After U.S. holiday sales rose about 3.9% in 2009, the idea is that spending will be even better this year now that the financial crisis is even further removed. Others are optimistic about the market in general after the market's typical seasonal rally got off to an early start: After the best September for stocks since 1939, the S&P has gained 16% since Aug. 31 while the tech-heavy Nasdaq is up about 21%. Even some Grinches are buying selectively, looking for consumer gems to diversify their holdings.
These companies -- my "11 stocks for Christmas" -- are leading the retail sector this winter. Each has gained 50% or more in the last three months alone:
Arctic Cat (ACAT): Arctic Cat has had trouble breaking through its previous 2010 highs near $15, but once it does, it could be up, up and away. On Oct. 28, Arctic Cat raised its 2011 guidance and changed leadership from its CEO to the No. 2 executive who helped it return to the black after 2008 and 2009 losses. Shares are up more than 50% in the last three months and the stock could really take off on strong winter sales of its iconic snowmobiles and related equipment.
Cabelas (CAB): Yes, CAB stock just gapped up after record third-quarter revenue and its fourth forecast-topping earnings report in a row. Despite new 52-week highs and a 25% run since Nov. 1, the stock may still be a good value, trading at just 12.6 times forward estimates (based on the fiscal year ending January 2012). The hunting and fishing retail giant fell on hard times amid the recession, but has come roaring back recently. A strong holiday showing could give this specialty retail stock another leg up.
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