Investing and Kids: Kid-Friendly Stock Market Companies to Study in a Mock Portfolio
Learning about stock market investing can be a a tremendously enjoyable experience for kids when they use kid-friendly companies in a mock stock portfolio. Whether students are elementary-aged or teens, choosing companies that have an interest to students will make the study of investments, investing, and economics a more relevant and even life-altering experience.
Follow the performance of these stocks by creating a mock stock portfolio using stock simulation software. This is remarkably easy to do using web sites such as Marketwatch and Yahoo finance, where you can track the performance of the stocks in a portfolio using their free software. You do not actually have to purchase shares of stock in a company in order to use stock portfolio monitoring software, which opens up an excellent opportunity for teachers to guide children in a hands-on learning experience that will simulate buying stocks and watching them perform in the stock market. Please see my article, Investing and Kids: What Do Stock Simulations Teach Kids About the Stock Market? for a more in-depth introduction to this topic.
After kids create their portfolio accounts, students can simulate buying and selling stocks in publicly traded companies on the New York Stock Exchange, the NASDAQ,and other stock exchanges. Here are 25 companies that make products and services that are well-known to kids.
Kid-Friendly Corporations in the Lunchroom
Kids need look no further than their lunchbox to start off their stock market experience. Chances are, kids aren't bringing cans of Pepsi to school, but the ginormous seller of this popular brand of soft drinks also makes many of the snack items kids eat daily. Pepsico (PEP) is a conglomerate food and beverage company and owns these well-known and popular products and brands: Frito-Lay, Sunchips, Pepsi, Auqafina, Ruffles, Doritos, Tostitos, Lay's, Rold Gold, Ruffles, and Gamesa (a popular cookie brand for the Mexico market). And if kids aren't eating Pepsico foods for lunch, then try breakfast: it also owns the Quaker brand Life cereal.
Speaking of cereal, General Mills (GIS) is the big daddy of cereal brands, but this company behind the Box Tops for Education program is the world's largest food company, according to their corporate web site. Kids will recognize Pillsbury, Betty Crocker, Gold Medal flour, Bisquick, Progresso soups, Haagen Daz ice cream, and a slew of other food products that are probably at home in pantries.
Another place to look for kid-friendly companies is in their Halloween candy. Tootsie Roll Industries, Inc. (TR) sells a surprising number of well-known candy brands, including Tootsie Rolls, Childsplay, Charms, Blow-Pop, Sugar Daddy, Sugar Babies, Junior Mint, and several others.
Another candy-maker, The Hershey Company (HSY) sells chocolate bars, chewing gum, toppings, and baking goods. This is another conglomerate company in the consumer goods category, and is one of the stocks tracked on the Standard and Poore's 500 stocks. Other companies in the food and beverages category include Coca-Cola (Ko), Kellogg's (K), and Kraft Foods (KFT).
Kid-Friendly Corporations at the Drive-Thru
The drive-thru is another place to find companies for your stock market study. Start with the big daddy of them all, Mickey Dees!
McDonald's (MCD). This multi-billion dollar company is perhaps one of the most well-known brand names in existence. The golden arches are well-known for their burgers and fries, but they are also an innovative company with a strong business model. This company has grown both domestically and internationally, and is well-known for its business model of being not only in the food business, but also in "real estate." Overseas McDonalds serves cuisine that appeals to the local clientele, which means a diverse, global menu. This company has also used innovative ideas such as indoor play areas and extra services such as free Wi-fi for its customers.
For variety, you may want to veer away from burgers and fries. If you do, you might consider YUM! Brands (YUM), with over 37,000 restaurants is the worlds largest restaurant company. while you may not recognize this company immediately, you will probably recognize its restaurants: Taco Bell, Pizza Hut, Long John Silver's and Kentucky Fried Chicken. What makes this company interesting to follow is its international growth. While it is headquartered in Kentucky, YUM!'s real growth story is overseas. This is a hot stock and one that will be fun for kids to follow.
Kid-Friendly Companies in the Toybox
What better place to find kid-friendly companies than in the toy box? Chances are that kids who are studying the stock market are too old for some toys, but toys are a surefire product with a strong familiarity quotient, especially for kids with little brothers and sisters.
Choose makers of popular toys and games that are current crazes. For example, Hasbro makes Littlest Pet Shop toys, a line of collectible bobble-head animal figurines with tiny accessories that appeal strongly to preteen girls. Hasbro also has Strawberry Shortcake, GI Joe, Tonka, and My Little Pony. Hasbro makes Clue, Sorry, and Hi-Ho Cherry-O, and owns the brands for Milton Bradley and Parker Brothers (Monopoly, anyone?)which are in the top 10 best-selling board games of all time. This toymaker does a 6 billion dollar business with its products and licensing agreements with Electronic Arts, a maker of video game products.
Mattel (MAT) is a toy stock with so many well-known name brands that kids will keep coming back to this company as one to watch in their stock portfolio. Just a few of Mattel's popular brands include Barbie, Fisher Price, Hot Wheels, Polly Pocket, Matchbox, and Batman, Sesame Street, and High School Musical.
What about Cepia LLC, the maker of Zhu Zhu pets? Sorry, this is a privately owned company and isn't publicly traded on the stock market. But I'd keep my eyes on this one. Who knows? Maybe this company will be bought out by one of the bigger toymakers.
Companies for Tech-Savvy Kids
Many kids these days spend more time on their computers, video games, and other various electronic devices than anyone could ever imagine. Some kids are completely immersed in the experience of the digital age. So here are some kid-friendly companies from the digital realm.
The maker of the iPad, the iPod, and the iPhone is a strong candidate for your list of stocks to watch. Apple (AAPL) has been in and out of the news since Steve Jobs went head to head with Bill Gates during the mid-90s. Kids nowadays probably won't remember this history. Now that's old news but the success of Apple a second time around is an amazing example of a company that takes creativity, innovation, and risk-taking to new heights.
You might want to look at other cell phone companies as a point of comparison. Many kids nowadays have their own phones. How are companies like Nokia (NOK) and LG faring?
What about the maker of the popular Wii gaming console?This revolutionary video game system integrates a kinesthetic experience into video game play. Wiis have been coming down on pricing and continue to take the gaming market by storm. But what about their parent company Nintendo? How are they doing? They're doing great, but Nintendo America is a privately held subsidiary of Nintendo Co. Ltd. (NTDOY) based in Japan. In fact, Nokia and LG are also international companies not headquartered in the US, so keep this in mind if you want to limit your selection of companies to American ones trading on the New York Stock Exchange and the NASDAQ.
Speaking of video games, don't forget XBox 360s are made by Microsoft (MSFT). The Xbox 720 is supposed to be released in 2011 or 2012, and it would be interesting to follow the performance of these two heavy-hitting video game Goliaths as the products compete for market dominance.
Now that the gaming systems are covered, there are also a host of video games to consider. Well-known video game makers include Electronic Arts (ERTS) and Activision Blizzard (ATVI). These companies makes video games for several video gaming systems which is a risk-management technique.
Kid-Friendly Companies at the Mall
A favorite hangout of the preteen crowd during the cold winter months here in Iowa is the local mall. this shopping mecca holds lots of possibilities for your young stock entrepreneurs. And if the mall isn't inspirational, then just take a look at what kids are wearing. Hot name brands may go head to head with low-cost retailers. Which one will perform the best?
Which is performing better at the mall? Abercrombie and Fitch's (AFN) high-priced designer clothing versus the diversified offerings of Sear's Department Stores owned by Sears Holdings (SHLD) which not only sells kids' clothes, but snowblowers and automobile tires and bedspreads?
What about retailers that market specifically to elementary-aged kids? Aeropostale (ARO) recently opened up a new line of stores for this age group. Other companies in this category include Children's Place Retail Stores Inc. (PLCE), Gap Stores, including Baby Gap and Gap for Kids (GPS), and The Gymboree Corporation (GYMB).
Maybe it's entertainment you are looking for at the mall. Check out Disney (DIS) and Build-A-Bear Workshop, Inc. (BBW) stores.
Heely's Inc. makes shoes that convert into inline skates. These shoes are fad in the best sense, so you should take a look at the stock's performance over the last five years. This company has trended up over the last few years, but has lost over 90% of its value for folks who bought 5 years ago. This stock tells an interesting story about the danger of buying stocks for fad items.