This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stocking-Stuffer Stocks for the Holidays

Craig Hodges, the Dallas-based portfolio manager of the Hodges Fund (HDPMX), says two stocks owned by his fund make terrific substitutes for actual gifts this holiday season with potential upside over the near-term.



Sirius XM (SIRI)

Holiday Gift Equivalent: A monthly subscription to Sirius satellite radio is $12.95 per month, or nearly 10 shares of Sirius XM, which trade for $1.39.

Hodges' Take: The Hodges Fund's Sirius XM investment has risen 130% this year. "Sirius XM's product has slowly but surely become more accepted. I've noticed it with my peers. I love the financial content and I find myself listening to that. When I'm in a car without it, I ask myself why they don't have it.

"Our theme with Sirius XM is that it's a long-term holding. I don't think it's going to double in a year, but it could be a good long-term 20% or 30% grower per year. The major ingredient is the car companies. You're seeing a resurgence in the automobile industry. That will drive this product for the next few years."



Chico's FAS (CHS)

Holiday Gift Equivalent: One share of Chico's FAS can be bought for $12.29, while shoppers can select from a seemingly endless number of earring and bracelet designs that cost $13.99 or less.

Hodges' Take: Chico's accounts for 2% of the Hodges Fund as of Sept. 30. While the return on the investment is minus 11% in 2010, Hodges is forecasting a rebound.

"This is one that is in the middle of a resurgence. This is a fallen star and you don't hear about it as much, but they are slowly improving fundamentals under the radar. I think they can earn $1 a share next year, and the Street is looking at 82 cents a share. Chico's stock could trade in the upper-teens. While you wait, you can make a little money with a dividend.

"It's a feast or famine in this business. If you're wrong, especially with women's apparel, you can get pounded. But they have ironed out their inventory situation and they take fewer risks than they used to. I don't know that it'll get hot like it did years ago, but you could see the stock in the $20s a couple of years out."

With more than $325 million in total assets, the Hodges Fund has roughly 40 stock holdings of different market values that Hodges expects will help with a long-term growth strategy. Specifically, Hodges looks for domestic stocks that may currently be out of favor but appear to have turnaround potential.

In addition to Sirius XM and Chico's, the fund has investments in Transocean (RIG), Wal-Mart (WMT) and Krispy Kreme Doughnuts (KKD).

The Hodges Fund has performed well over the past year, beating the market by over 400 basis points, although the fund has a three-year annualized return of minus 12%. Looking at annual returns over the past few years, performance has been lumpy. The Hodges Fund returned 36% in 2009, 8.5% in 2007 and 18% in 2006. However, these gains were offset by a 50% dive in 2008.

"We had a real rough 2008," Hodges says. "But in the 19 years we've been a fund, we've outperformed the market in 16 of those years."

5 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,051.73 -48.45 -0.28%
S&P 500 1,973.63 -4.59 -0.23%
NASDAQ 4,424.7040 -7.4420 -0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs